Case Name: WILLIAM S. WILLIAMS, Appellant, v. THE WESTERN UNION TELEGRAPH CO., THE UNION TRUST CO., et al., Respondents
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1881-06-06
Citations: 15 Jones & S. 380
Docket Number: 
Parties: WILLIAM S. WILLIAMS, Appellant, v. THE WESTERN UNION TELEGRAPH CO., THE UNION TRUST CO., et al., Respondents.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 47
Pages: 380–386

Head Matter:
WILLIAM S. WILLIAMS, Appellant, v. THE WESTERN UNION TELEGRAPH CO., THE UNION TRUST CO., et al., Respondents.
' Order for examination of party before trial—when not granted to entibie plaintiff-to make and serve amended complaint—application for examination of corporation, what must be alleged.— General Buie 83.—Code Oivil Procedure, § 872.
Where it does not appear that it is necessary to the prosecution of plaintiff’s right, so far as the form of his complaint is concerned, that it should be made more definite and certain, an order for the examination of defendants before trial, to enable plaintiff to serve a complaint amended in that regard, will not be granted.
Whether this would be so, if a motion had been made, or an order granted, that the complaint be made. more definite and certain, quaere.
The moving affidavit, upon application for examination of a corporation as a party, must state the name of the officer, or director, whose testimony is necessary and material.
Before Speir and Freedman, JJ.
Decided June 6, 1881.
Appeal by plaintiff from an order vacating an order, granted ex parte, for the examination of the defendants.
The action was brought upon allegations of an unlawful combination of the defendants, &c., to restrain the defendants, and particularly the Union Trust Co. from issuing to the stockholders of the defendants or any of them, $15,526,590 of the capital stock of the Western Union Telegraph Co., alleged to be in excess of its authorized capital, until such stock should be fully paid for ; and to restrain the defendant directors from voting in favor of such increase ; and for other relief in case such increase should be effected.
Plaintiff’s affidavit, upon which the discovery order was granted, contained allegations, among others, as follows:
“ That this deponent has served his complaint in this action, but he is not able from the facts in his possession; to state particularly the names of the defendants who are actually engaged in the plot for the purchase of such property, at such largely enhanced value ; but the defendants above named, whom this deponent desires to examine, are in full possession of all the facts concerning the same, and this deponent can obtain the facts necessary to enable him to frame and serve an amended complaint in this action, wherein he shall set forth with particularity all the steps which have been taken in the conspiracy charged in the complaint, by their examination.
“Further, this deponent shows that the sum proposed. to be paid by the Western Union Telegraph Co. to the Atlantic and Pacific, is largely in excess of the value of the property which it receives therefor, but how much in excess and what the particulars of such excess are, and what the particulars of such property is, this deponent is unable to state with definiteness and particularity, but, upon the examination of the defendants above named, whose depositions it is here sought to obtain, this deponent will be able in that respect to frame an amended complaint, wherein shall be set forth with greater particularity, averments respecting the value of said property, and who of the defendants are engaged in the conspiracy to issue the stock of the Western Union Telegraph Co. therefor, at very much more than the value of such property.
“ This deponent further shows that it is charged in the complaint, that the Western Union Telegraph Co. intends to divide fifteen million five hundred twenty-six thousand five hundred ninety dollars of the capital stock of said company among the stockholders, without any compensation therefor being' given to the company, upon the pretense that within the last sixteen years said company has invested of its earnings in new lines, plants and machinery and patents and other property, that amount of money. This deponent is informed and believes that this pretext is a fraud ; that no such sum has' been invested, but that on the contrary thereof, the investments have been largely made to keep up the efficiency of the lines, and were in the nature of repairs and not for the construction of new lines.
“Deponent further shows, that during the last few* years, over seven millions of capital stock have been divided among the stockholders of said company, and he will be able to show with definiteness and exactitude by the examination of the foregoing parties, or some of them, just what dividends have been made within the last sixteen years by the Western Union Telegraph Co. to its stockholders, of stock and cash, and the value of the property acquired during that time by the company, and “which among the defendants are engaged in the fraudulent scheme of issuing such stock in violation of law.
6‘Deponent further states that he desires to examine the Western Union Telegraph Co.—that ISTorvin Green is the president, and the other defendants herein are directors'therein, and particularly he desires to examine the books and papers of said company, especially the construction accounts and the income accounts and dividend accounts of such company, and the book of minutes of such company, to the end, that he may be able to obtain information as to whether any such dividend as is here proposed to be made, has been earned by said company, or whether the pretexts of the defendants in that particular, are true or not.
“And deponent further desires to examine the defendant, the Union Trust Co., of which Edward King is president, to ascertain what certificates of stock have been delivered to it, and what is the purport of such certificates, and to obtain copies thereof, and how many such certificates have been delivered by it, and to whom; and to that end to examine all books of account of said Union Trust Co., containing entries of any and all transactions in relation to the trust of which it is the trustee of certain stock of the Western Union Telegraph Co., all of which is necessary and material to deponent in the prosecution of this action.”
An order vacating the discovery order was granted at special term upon the following opinion :
“ Sedgwick, Ch. J.—Although the examination of O’Connor v. United States Life Ins. Co. was asked and given, for the purpose of the plaintiff framing an amended complaint, yet there was no reference in the arguments to the purpose, or to what, to justify the examination, must be the necessity of amending the complaint. 0
“In the present case it does' not appear that it is necessary to the prosecution of plaintiff’s rights, so far as the form of his complaint is concerned, that it should be made more definite and certain. It is not demurrable for indefiniteness or uncertainty.
“Until the defendants attack it on these grounds,the plaintiff’s present complaint will, entitle him to all the relief that his proven cause of action under it will call for. If he were obliged, under stress of an order, or, perhaps, a motion to amend, by making more definite and certain, another case might, perhaps, be presented.
“ The present motion will be denied on the. ground that the examination is not necessary for the purpose of making the complaint more definite.
“Nor do I think that the papers show that the plaintiff needs an examination to discover the names of persons that may be made defendants. His rights, as claimed, can be fully asserted without more defendants. Motion granted, with $10 costs.”
John Sessions, attorney, .and Robert Sewell, of counsel, for appellant.
Lord, Bay & Lord, for respondent, B. D. Morgan.
Man <6 Parsons, for respondent, N. G-. Hunt.
Porter, Lowrey, Soren & Stone, attorneys, and John 'K. Porter, of counsel, for respondent, The Western Union Telegraph Co., urged:
I. It did not appear that the depositions of the defendants were material for any purpose other than framing an amended com plaint, and for that purpose they were plainly immaterial, no objections having been taken to the complaint, and the plaintiff having already obtained an injunction—the only relief he demanded.
II. The procedure under this provision of the Code rests in the sound discretion of the judge (Glenny v. Stedwell, 64 N. Y. 120).
III. The plaintiff failed to make a case entitling him to this provisional remedy (Levy v. Loeb, 5 Abb. N. C. 157-160; Corbett v. De Comeau, Id. 169). 1. The pendency of other proceedings to enjoin the defendants is ground for disallowing examination (Wetmore v. Hegeman, 3 Abb. N. C. 123). 2. The plaintiff did not comply with' section 872 Code, subds. 2 and 4, and general rule 83 (Winston v. English, 35 Super. Ct. 513). 3. He stated nothing to judicially satisfy the court that the application is in good faith for a discovery material to the statement of his cause of action. (Schepmoes v. Bousson, 1 Abb. N. C. 481). 4. He assumed to substitute therefor his own judgment, and that of his attorney (Robertson v. Russell, 20 Hun, 243-245; Greer v. Allen, 15 Id. 432-436). 5. Material allegations of plaintiff’s affidavit are on information and belief (Tilton v. United States Ins. Co., 1 Abb. N. C. 348). 6. The pretense of the plaintiff is that some of the defendants were engaged in a criminal conspiracy (2 R. S. 691, § 7, subd. 6). 7. The proceeding is compulsory, and it cannot be resorted to for the purpose of criminating the witness (Phoenix v. Dupuy, 2 Abb. N. C. 146; Corbett v. De Comeau, supra; Leggett v. Postley, 2 Paige, 599, 601, 602; Taylor v. Bouer, 2 Barb. Ch. 304). 8. The affidavit shows no purpose to use the depositions on the trial'.
Miller & PecTcham, attorneys, and Wheeler H. PecTcham, of counsel, for respondent, The Union Trust Co., among other things, urged:
affidavit does The not comply with subdivision 7 of section 872 of the Code, as amended by chapter 536 of the Laws of 1880, in that it does not mention the name of the officer or director of the trust company whose testimony is necessary and material.
General Term, Second Department, February, 1877.

Opinion:
By the Court.—Speir, J.
The object stated by the plaintiff in his affidavit in making this motion is, to procure materials which shall enable him to make an amended complaint. The defendant's motion to vacate the order of examination was granted chiefly upon the ground that it did not appear that it was necessary to the prosecution of the plaintiff's rights, so far as the form of his complaint was concerned, that it should be made more definite and certain ; that the form of his complaint will entitle him to all the relief that his proven cause of action under it would call for; in short, that the moving papers did not conform to Buie 83 of general practice, in that it shows no facts or circumstances as to the materiality or necessity of the examination.
These are sufficient grounds for the vacation of the order. So far, however, as the defendant, the "Union Trust Company, is affected by the motion, the affidavit is defective in another material matter. It does not mention the name of the officer or director of the trust company whose testimony is necessary and material. By the seventh subdivision of section 872 of the Code, an officer of a corporation defendant could not be examined as a party (People v. Gas Light Co., 74 N. Y. 434). This is now permitted by chapter 536 of the Laws of 1880, but as a condition it is enacted that the affidavit must state the name of the officer or director whose testimony is necessary or material. The moving affidavit contains no such statement.
The order must be affirmed, with costs.
Freedman, J., concurred.