Court Opinion

ID: 8634534
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:43:02.114797+00
Date Added: 2024-06-11T16:55:53.179712
License: Public Domain

NELSON, District Judge.
The act of congress (1 Stat. 82, § 15), in substance, provides, that the courts of the United States in trial of actions at law, on motion and due notice thereof being given, shall have authority to require the parties to produce books or writings in their possession or power, which contain evidence pertinent to the issue, in cases and under circumstances where they might be compelled to produce the same in chancery. There is also authority to grant final judgment upon the issue involved in the trial, or a judgment of non suit in case the order for their production is disobeyed. This statutory provision is peculiarly stringent, and when a court is asked to enforce it, a plain case must be presented for its interposition. There is no limitation in regard to the kind of actions at law which must be on trial in order to entitle either party to the benefit of the statute, and the objection urged by the debtor’s solicitor, that this is a bankruptcy proceeding, and, therefore, not within its purview, I think n'ot tenable. The only qualification is, that the right must be such as a court of equity would sustain on a bill of discovery; if so, then the summary method provided in the statute is a substitute for the bill.
Now, while I am satisfied that the petition seeks to have the books produced for some purposes not pertinent to the issue on trial, and on that account irrelevant, still I think an examination of the testimony already introduced shows that the books of the Savings Association do contain an account with the petitioning creditor, as. represented by his pass book introduced in evidence, which purports to be a statement of such account, and that it is in the power of the debtor to produce the books. If, in addition to this, it is conceded that the testimony would establish the further fact that the debtor is the sole owner of the corporate rights, claimed by virtue of the articles of association, then, irrespective of any question as to whether such an association is a corporation or not, the petitioner would be entitled, as a matter of right, to the benefit of an examination of all papers and books so far as they may relate to any business trans*9action between himself and the association, and also so far as they may corroborate the witnesses in regard to any admission of Men-denhall that he was about to manage the business' of the association so that he would be solely and individually responsible.
It is undisputed that there is testimony already in the case tending to establish the fact that the affairs of this association were under his sole and exclusive management, and the books and other papers.. are, therefore, certainly competent and proper evidence. I think a prima facie case of the materiality of these books has been made out, as the testimony now stands, and that a bill of discovery, according to the rules of equity, would be allowed.
I have thus far placed the authority to act upon the fifteenth section of the judiciary act. If incorrect in this position, I think the general scope of the bankrupt law would give plenary power to this court to compel the examination of all papers and books of the debtor, or in his possession, if pertinent to the issue, and required for the protection of the rights and interest of the petitioning creditor. The proceedings at this time seem to require the exercise by the court of this power, and I grant the order asked for.
Inasmuch as the testimony in the case is nearly closed, I will accede to the request of the debtor’s solicitor and hear the case upon the evidence already taken by the commissioner and reported, and such other as may be introduced before me in connection with the books and papers, when produced. The order nisi is made absolute, and the books, &c.,-will be produced before me at my chambers, in St. Paul, on March 2, 1874, at 11 a. m.
[This ease was subsequently heard upon motion to dismiss proceedings, which motion was denied. Case No. 9.424. Asrain upon the petition of a creditor to be substituted in the proceedings for the original petitioner. Motion granted. Id. 9,425.]