Case ID: abb-pr_10/html/0340-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Hoffman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

PEGRAM a. CARSON.
    
      New York Superior Court;
    
    
      General Term, January, 1860.
    Discovery and Inspection.
    On an application for discovery, enough must he shown to satisfy the court that there is reason to believe that the documents sought do in fact contain material evidence. Merely showing a belief that the papers in general of the plaintiff contain matter which would help the defence, is not sufficient;
    It must also appear that the party does not possess other means of proof.
    
    
      Appeal from an order denying a discovery of books and papers.
    The facts are stated in the opinion.
    
      
       In addition to the authorities cited by the court, the reader may refer to the following :
      The papers and documents must be specifically set forth. (Jackling a. Edmonds, 3 E. H. Smith, 539 ; and see Watson a. Kenwick, 4 Johns., 381.)
      A general discovery of all the books and papers of the adverse party should be denied. (Cassard a. Himnan, 6 Duer, 695.)
      Plaintiff may have an order for discovery, in order to enable him to furnish a bill of particulars. (Prince a. Currie, 2 How. Pr. E., 119.)
      An administrator was allowed to have a discovery of defendant's books and papers, though the complaint was on a promise to the administrator, and not to the decedent. (Mathis a. Vanderbilt, 2 Abbotts’ Pr. B., 387.)
      The application must show a necessity for the discovery. (Stanton a. Delaware Mutual Insurance Company, 2 Sand/., 662.) The applicant’s opinion on the point is not enough. (Wilkie a. Moore, 17 How. Pr. E., 480.)
      Where an ordinary notice to produce on the trial would be sufficient, the order was denied. (McKeon a. Lane, 2 Hall, 520 ; and see Van Zant a. Cobb, 12 How. Pr. E., 545.)
      An order for discovery will be denied if it is manifest that the applicant can have no defence which he cannot, without the papers sought for, set up in due form to raise the proper issues. It is not to be granted to protect him from answering untruthfully. (Mora a. McCredy, 2 Bosio., 669.)
      An order for the production of copartnership books which belong equally to both parties to the suit, may be obtained as a matter of course, where the defendant swears that he is unable to answer fully without an inspection. (Chancery, 1842, Brush a. Anderson, 2 Chan. Sent., 71; and see Kelly a. Eckford, 5 Paige, 548.)
      See also Higgins a. Bishop, 12 N. T. Leg. Obs., 127; Crary a. Smith, 2 Comst., 60.
    
   By the Court.—Hoffman, J.

—The action is to recover a quantity of corn, which it is alleged was the property of the plaintiff1, and to the possession of which he was entitled. That about the 1st of August, 1857, the defendants wrongfully possessed themselves of a part thereof, and, on the 2oth of August, of the remainder. A demand and refusal is stated. The answer set up an ownership in the firm of Starling, McCulloch & Co., and a right to hold the corn under them.

The petition states that the plaintiff resides in St. Louis, Missouri, and has in his possession, or under his control, books of account kept by him in the year 1857, and prior to the 26th of August, containing entries of his accounts and transactions with the firm of Starling, McCulloch & Co., and also entries in relation to the corn in question.

Also letters written to him by said Starling, McCulloch & Company, or one of the members of that firm, during the same year, and prior to the said 26th of August.

Also copies of letters written and sent by the plaintiff to the said Starling, McCulloch & Company, or one or other of the members of that firm, in the said year, and prior to the said 26th of August.

Also copies of telegraphic communications, which passed between him and said Starling, McCulloch & Company, or one or other of the members of that firm, in the said year, and prior to the said 26th day of August.

The petition then states that the petitioners are advised by their counsel, and verily believe, that a discovery of all the aforesaid entries in all books of account of the plaintiff, and of all the letters, and copies of letters, and telegraphic commnnications above mentioned, is material and necessary to enable them to prepare for the trial of this action ; that, by such discovery, they verily believe it will appear that Starling, McCulloch & Company were the owners of, or interested in, the com in controversy, either jointly with the said plaintiff or otherwise, and were largely in advance to the said plaintiff on account of the same, and had a right to pledge the same to the said defendants, as they did pledge the same.

The statements of the petition, therefore, amount to this: The defendants believe the plaintiff has books, letters, or copies of letters, and telegraphic communications in his possession or control, which will, as the defendants believe, show some title in Starling, McCulloch & Company to the corn in question, and which they are advised by counsel are material and necessary for their defence on the trial. The substance is this, and nothing more: we believe your books and letters will help our defence, and, if they do, it is material for us that you should show them.

There is no allegation of knowledge, or of information from any one, as to the contents of one entry, or of one .letter, or communication being ¡mrtinent to the question in issue. It is difficult to imagine any statement more vague and indefinite than this.

In Hoyt a. American Exchange Bank (1 Duer, 602; S. C., 8 How. Pr. R., 89), a leading case in our own court, the discovery was directed to entries connected with the post-note, and Indiana bonds, the subject of controversy in the action. In Terry a. Hubei (12 N. Y. Leg. Obs., 146), I had occasion to examine the original petition in Hoyt a. American Exchange Bank, which is not stated in the report. The prayer was, that the defendants might give sworn copies of all entries in, any books, &c., in reference to, or showing where, under what circumstances, for what purpose, or consideration, and by and from what person or persons, the post-notes of the Morris Canal and Banking Company, and the seventy-three bonds of the State of Indiana, mentioned in the petition, were severally transferred or came into the possession of the defendants. The petition set forth that the defendants had books containing evidence relating to the merits of the cause, and to the facts aforesaid, a schedule of which books'were thereto annexed ; that the same would prove the allegations of the complaint. The order was nearly in the language of the prayer. Upon an application for a more full and perfect discovery, upon an allegation of the insufficiency of what, had been given, an order was made at special term, giving power to a referee to call for and examine all books, papers, and documents in the defendants’ possession or control, containing entries in reference to the discovery ordered by the previous order. This order was as unlimited, indefinite, and sweeping as that we are asked to make in the present instance. Except as to the matter of reference, it would serve as a precedent for this case. Upon appeal to the general term it was discharged, and the course pointed out for the dissatisfied applicant to move for a further discovery in definite particulars, which the return or other papers may induce the court to believe the party has in his possession, and which relate to the matters as to which a discovery has been ordered, and whose existence was shown to be probable.

The view of the subject taken by Mr. Justice Harris, in The Commercial Bank of Albany a. Dunham (13 How. Pr. R., 561), is applicable to this case. “ The plaintiffs specify no entry, or book even, which they propose to use as evidence upon the trial. They ask for license to search, at their own pleasure, all the books in which all the transactions of the defendants have been recorded for a period of eight years, in the expectation that, somewhere within the wide range, they may find some evidence that will aid them in sustaining the issue upon the trial.”

Justice Ingraham, in The People a. The Rector, &c., of Trinity Church (6 Abbott' Pr. R., 177), has expressed himself with equal decision against the right of a party to a discovery, upon allegations in a petition not more vague and indefinite than those in the present case.

In Davis a. Dunham (13 How. Pr. R., 425), the court, at general term, in the third district, held that the facts and circumstances must be stated sufficient to satisfy the court, or officer to whom the application is made, that there is reason to believe that the books, &c., which the party seeks to examine, do, in fact, contain material evidence.

The case of Gould a. McCarty (1 Kern., 575), must be adverted to. The petition was nearly as indefinite and sweeping as that in the present instance. In addition to the comments of Mr. Justice Ingraham (People a. Rector, &c., ut supra), upon the case, it should be noticed that the defendant submitted, to some extent, that the order should he made by admitting possession of “ a private boob, in which he made short entries of the purchase and sales of stock, or contracts therefor, and his ordinary check-book kept in the usual manner.” An order, at special term of this court, directed an unlimited delivery of sworn copies of all entries, and papers containing entries, relating to the merits of the action. But, on appeal, the general term limited the discovery to the entries and memoranda in his check-book, or private memorandum-book, mentioned in his affidavit read in opposition. A subsequent judgment, had on disobedience of this order, was carried, by appeal, to the Court of Appeals, and the order there examined, and judgment affirmed. The points decided by the Court of Appeals were, that the Revised Statutes, as to discovery of books and papers, were yet in force, and not superseded by the Code, and that the Superior Court had the same authority as the Supreme Court under them.

There is another point equally decisive against the defendants, and to support the order appealed from. There is not, in the petition, a statement to show that the defendant does not possess the means of proving, by other competent evidence, the title or interest of the firm of Starling, McCulloch & Company, which will enable him to sustain his case. The opposing affidavit shows that one of the firm can be readily reached as a witness.

"We consider some allegation of this nature to be indispensable.

In Stalker a. Gaunt (12 N. Y. Leg. Obs., 132), the subject was much considered. It was observed, in the next place, discovery was the mere instrument for obtaining evidence to make a legal right available, without pronouncing a -decision on that right. (Hare on Discovery, p. 110.) Hence it was essential that a bill for that purpose should state that it was in aid of some judicial proceeding. (Attorney-general a. Rose, 8 Price, 205; Conderte a. Watkins, 5 Mad., 18.) “The Revised Statutes do not change this principle. There must be a suit pending in the Supreme (or other) Court when the petition is presented. The change, by permitting an application to the common-law court itself, instead of resorting to another tribunal, is but matter of convenient practice.

“Mow, the foundation of such a bill was the inability of the party to establish his case without the discovery. It is said, generally, that it lies because he cannot otherwise prove the facts, or in aid of proof. The meaning of the last clause I take to be, that the aid is necessary in order to establish one or more facts in a series of facts which the party must prove, or to supply a partial defect in the testimony as to one or more of such facts, or as to the single fact on which the right depends. Whether the suit was in the Court of Chancery, or in another court, was immaterial as to the rules which governed discovery,”

I have carefully examined the following authorities: Seymour a. Seymour (4 Johns. Ch. R., 410); Gelston a. Hoyt (1 Johns. Ch. R., 543); Leggett a. Postley (2 Paige, 599); Newkirk a. Willett (2 Cai. Cas., 296); March a. Davidson (9 Paige, 580); Bass a. Bass (4 Hen. & Mumf., 465); Lowe a. Stebbins (9 Paige, 624); Vance a. Andrews (2 Barb. Ch. R., 370); Duvall a. Ross (2 Mumf., 290); Norwalk Railroad Co. a. Story (17 Conn., 213). While there are to be found some modifications of the rule, yet I apprehend that the rule stated in the explicit language of the chancellor, remains to this day substantially the doctrine upon the subject. “ If a bill seeks discovery in aid of the jurisdiction of a court of law, it ought to appear that such aid is required. It is not denied, in this case, that every fact material to the defence at law, can .be proved by the ordinary means at law, without resorting to the aid of this court. I should presume, from the bill, that every material fact respecting the ownership of the vessel could be established without coming to this court; and such trials are not to be delayed, and discoveries required, when the necessity of such delay and discovery is not made to appear.” (Gelston a. Hoyt, 1 Johns. Ch. R., 546.)

The power, under the Code, to examine parties as witnesses, was then adverted to, and it was concluded:

“ Two important principles appear to me deducible from this examination of the subject. If the discovery is attainable by competent and available testimony, other than that of the party, a production of books and papers should not be allowed, except under special circumstances. If it is attainable by the examination of a party as a witness, it should be also refused, except upon some special ground.”

The results in this case are fully approved of, and acted upon, by Mr. Justice Harris, in The Commercial Bank a. Dunham, before cited.

And, in McAllister a. Pond (15 How., 299; 6 Duer, 702), Mr. Justice Woodruff says: “ One of the first facts which should appear, on an application for the discovery of books or papers for the purpose of preparing for trial, is, that the applicant has not in his possession the same information, or if he has, that he has not the means of establishing, by other available proof, the contents of such books and papers.”

Again : “ It is not stated that the plaintiff cannot prove, without the production sought, every fact which is material to his case.”

We consider the present application to be entirely against settled rules, and that the order below ought to be affirmed; nor is there any thing in the case to justify our giving the party an opportunity to renew it. 
      
       This principle was further illustrated in the following cases. Gkax a. Ken-ball (M. T. Superior Ct., At Chambers, May, 1860). In this case, a discovery was allowed only as to matter in respect to which plaintiff might be entitled to relief. The nature of the action is fully stated in the opinion.
      
        Buckham, Cady fy Smales, for the motion.
      
        Qeorge W. Parsons, opposed.
      Hoffman, J.—The firm of Ely, Bowen & McConnell made a general assignment to the defendant, Kendall, of all their property, to pay their creditors pro rata.
      
      The plaintiffs are among such creditors. They bring this action to remove him from his situation as assignee, and have a receiver appointed. The prayer for judgment is limited to this.
      The members of the firm were, Henry 0. Bowen, special partner, and Henry G. Ely, Edward E. Bowen, and William H. McConnell, general partners.
      A petition is now presented for a discovery of books and papers. The discovery is asked from Ely, of books and papers relating to the property and transaction of the firm of Ely, Clapp & Bowen. He swears that he has not the possession or control of any such books, but that they were delivered over to, and remain in possession of Kendall.
      It is asked of the defendant, Henry C. Bowen, as to books, &c., connected with the business of the firm of Ely, Clapp & Bowen, and Ely, Bowen & McConnell, who also denies possession or control of such books, having only access to them as a partner.
      The allegations of the complaint as to the misconduct of Kendall'in relation to which the books may furnish evidence, are' mainly these :
      I. That he has employed others to attend to the business, instead of doing it himself, and has allowed them to draw large sums of money out of the trust-funds at their discretion.
      II. That the charge of $15,000 for expenses was needlessly incurred.
      III. That the firm of Ely, Bowen & McConnell carried on business at the store No. 324 Broadway, which store, and lease thereof, belonged to Bowen, McNamee & Co., holding it at a yearly rent of $13,000, for a term of five years, unexpired. A series of transactions between the two firms, with the consent of the assignee, is then stated, the effect of which was to create an unjust and unlawful credit of $20,000, in favor of Bowen, McNamee & Co., upon which they have received a dividend. There is nothing in the petition, complaint, or affidavits, to show that this transaction cannot be fully established by testimony independently of the hooks; indeed, there is nothing to show that the hooks would even assist in ascertaining the facts. Taking the admissions and statements in Kendall’s answer, it is quite plain that the plaintiffs have other means, if any exist at all, besides the books, to make out this part of his case.
      IV. That previous to the formation of the firm of Ely, Bowen & McConnell, the defendants, Ely and Edward E. Bowen, were partners in a firm of Ely, Clapp & Bowen, in which Henry C. Bowen was a special partner, having contributed $20,000 as capital, which firm ceased to do business on the 1st of January, 1856. The stock of merchandise was sold to Ely, Bowen & McConnell, on the 1st of January, 1856 ; the sum of $20,000 of the money of the latter firm was passed to the credit of Ely, Clapp & Bowen, and drawn out by said Henry C. Bowen, as his special capital therein, leaving a large amount of debts and liabilities unpaid. Such firm of Ely, Clapp & Bowen was then insolvent, and the business of the last two years had resulted in a loss, as shown by their books and balance-sheets, and such insolvency was known by said Henry C. Bowen. The allegation founded on this and some other details is, that Henry C. Bowen had made himself a general partner in the firm of Ely, Clapp & Bowen, and liable for the debts thereof; that the assignee, though acquainted with all these facts and circumstances, has not taken measures to enforce payment of debts from said Bo\ven. The objection of the defendant’s counsel, that the general assignee cannot impeach a transaction which his assignors could not do, is decisive. The defendant could not be removed for neglecting what he could not attempt. (10 Paige, 210 ; 7 Bari., 466.)
      V. That immediately before the assignment, Ely, Bowen & McConnell, in pursuance of an arrangement made by Ely and Henry C. Bowen, passed over to Bowen, McNamee & Co., about twenty-nine thousand dollars’ worth of merchandise, and about seventy-two thousand dollars’ worth of promissory notes, and mercantile securities, with the design and intent to prefer that firm over the other creditors of said Ely, Bowen & McConnell. The defendant was culpable in not recovering this property. The answer given under the last head applies to this case. Besides, the facts are sufficiently admitted in the answers to raise the question. The details can be proven, if necessary, without the books.
      VI. That after the assignment, the defendant Ely retained a large amount of promissory notes belonging to Ely, Bowen & McConnell, which ought to have been taken possession of by the assignee ; that he disposed of the proceeds thereof for his own use, and in payment of creditors whom he had promised to prefer. It is not shown that this matter cannot readily be proven without the books.
      There are a few other matters stated in the complaint, not of moment on this application.
      I have gone carefully over the complaint and petition. I cannot see reasonable ground for any discovery within the rules of the court, except as to the expenses of $15,000, and the allowances to Ely and Edward H. Bowen, McConnell, and the bookkeeper.
      The only order that can be made is, that the defendant, Kendall, furnish to the plaintiffs attorney, in ten days from service of copy of this order, sworn copies of all accounts and entries in any books or papers in his possession, or under his control, relative to his expenditure in relation to the said assigned estate ; and also in relation to the money allowed the defendants, Henry G. Ely, Edward H. Bowen, and William H. McConnell, and to the bookkeeper of the firm, out of the trust-funds which have come to his possession, or under his control.
      Order accordingly.
      ' Lynch a. Henderson (Supreme Court, First District, Special Term, March, 1859). This action was for libel, and plaintiff moved for an order for delivery of a copy of a printed book to him, to enable him to prepare his complaint.
      
        Ingbaham, J.—The plaintiff moves for an order compelling the defendant to deliver to him a copy of a printed book in his possession, on the supposition that it contains libellous matter against the plaintiff, in order to enable him to prepare his complaint in this action. ¡
      
      Without expressing any opinion as to the propriety of compelling a defendant in an action for a libel to deliver to the plaintiff a copy of the libel, I am clearly of the opinion that this motion should not be granted, because :
      1. The affidavits do not show what is stated in the book of which the plaintiff seeks a discovery, and, therefore, the Court cannot decide- whether it is material or not.
      2. Because the affidavits do not specify any particular information desired, so that the Court could order a sworn copy to be delivered.
      3. Because the plaintiff is not entitled to the whole book, but only to the particular article on which his action is founded.
      Motion denied, without prejudice to another motion, on payment of $10 costs.