Wertheim v. Continental Railway & Trust Co.

Citation15 F. 716
PartiesWERTHEIM and others v. CONTINENTAL RY. & TRUST CO.
Decision Date17 February 1883
CourtU.S. District Court — Southern District of New York

Evarts Southmayed & Choate, for complainants.

Henry L. Burnett, for defendants.

WALLACE J.

There are informalities in the record upon which this motion to attach witnesses for contempt has been argued, which lead to a denial of the motion. But counsel have desired that the main question involved should be considered and decided as a guide to their future action in the cause. This question is whether the president and secretary of the North River Construction Company, a corporation, can be compelled by a subpoena duces tecum to produce books and papers of the corporation in a suit in equity, to which the corporation is not a party, upon the application of one of the parties. The proceeding is opposed upon the authority of several cases in the state courts of New York which deny the right of a party to compel the officers of a corporation to produce its books as evidence in a cause to which it is not a party. The first of these cases is the President etc., of Bank of Utica v Hillard, 5 Cow. 153, where a clerk of the bank refused to produce the books. SAVAGE, C.J., said: 'The obligation of the witnesses to produce the books upon the duces tecum depends on the question whether they were in his possession or under his control;' and the obligation was denied because he was a mere clerk of the corporation. The same case was before the court again (5 Cow. 419) upon a motion to attach the cashier of the bank, who had refused to produce the books under the subpoena, and was denied because the bank could not be required to produce evidence against itself as a party to the action. Both of these cases, by the strongest implication, concede the power to compel the production of the books by an officer when the corporation is not a party. Thirty years later the point arose again in La Farge v La Farge Fire Ins. Co. 14 How. 26, upon a motion for an attachment against the president of the defendant for refusing to produce its books under a subpoena duces tecum and the motion was denied upon the authority of the cases in 5 Cow. The precedent thus established was recognized incidentally or directly in several subsequent cases, and was assumed to apply whether the corporation was a party or not a party to the suit. The question was never considered by the courts of last resort, and was put at rest by section 868 of the Code of Civil Procedure, which expressly conferred the right theretofore denied.

As this suit is in equity, the present motion is not affected by the provisions of the Code of Civil Procedure, and the court is asked to apply the doctrine of the antecedent decisions of the state courts. No authority is found in any decisions of the federal courts denying the right to compel corporations to produce evidence which may be necessary and vital to the rights of the litigants. On principle it is impossible to suggest any reason why a corporation should be privileged to withhold evidence which an individual would be required to produce. It may be inconvenient, and sometimes embarrassing, to the managers of a corporation to require its books and papers to be taken from its office and exhibited to third persons, but it is also inconvenient and often onerous to individuals to require them to do the same thing. Considerations of inconvenience must give way to the paramount right of litigants to resort to evidence which it may be in the power of witnesses to produce, and without which grave interests might be jeoparded, and the administration of justice thwarted.

The researches of counsel have been unavailing to find any decisions of the courts of other states which sanction the rule thus maintained by the courts of New York. Notwithstanding these cases, it is believed to have been the common practice in this state to subpoena officers as witnesses to produce the books of their corporations in actions between third persons. In other states, so far as is known, the right to do so has never been controverted. There has been strenuous opposition on the part of corporations to the production of their papers and records in suits to which they were not parties. The effort of telegraph companies to maintain the privacy of their messages is an illustration, (see Henisler v. Freedman, 2 Pars.Select Cas. 274; U.S. v. Babcock, 3 Dill. 566,) but immunity has never been claimed upon the ground now taken.

Why should not the officers of a corporation be required to produce the books of the corporation as witnesses when the books are necessary evidence? The corporation can only act through its officers. The suggestion that the books are in the legal custody of the corporation, and not of its officers, may be theoretically correct. If technically true, it is not an objection to compelling the officers to produce them. As said by Lord ELLENBOROUGH, in Amey v. Long, 1 Campb. 17: 'Although a paper should be in the legal custody of one man, yet if a subpoena duces tecum is served on another, who has the means to produce it, he is bound to do so.'

In Crowther v. Appleby, L.R. 9 C.P. 27, Lord DENMAN asks: 'When documents are in the possession of a company, who but the secretary can be subpoenaed to produce them? ' Courts of equity have always permitted the officers of corporations to be made parties to bills of discovery, upon the theory that they are the custodians of the books and documents of the corporation, and may be compelled to produce them and answer to the interrogatories propounded.

As has been indicated, the cases in 5 Cow. have been misapplied by the later cases in the courts of New York, and do not sanction the precedent which they are asserted to establish. This court must refuse to follow these later decisions, deeming them to be unsupported by precedent, an innovation upon the rule generally recognized, and opposed to good sense.

The production of documentary evidence in which a party to a cause has an interest, may, at common law, (independent of the auxiliary remedy by bill of discovery in chancery,) be had in three ways: (1) By an order for inspection; (2) by a notice to produce; (3) by a subpoena duces tecum;-- the first used where the writings are required before the trial takes place or the pleadings are completed; the last two where the writings are wanted at the trial. The purpose of this note is to give a concise statement of the rules governing the subpoena duces tecum, but as an introduction to these it is proposed to present a brief sketch of the two other methods just stated.

I. The Order for Inspection.

The English courts of common law early exercised a power to make an order for the inspection of writings in the possession of one party to a suit in favor of the other, [a] in order to assist the plaintiff in drawing his declaration, [b] or the defendant in framing his pleas. [c] A few examples of this practice will suffice. A tenant of a corporation was assessed an increased rent by a jury under the provisions of a statute permitting this to be done when the value of the lands should be increased. He indorsed the finding of the jury on his lease. The corporation afterwards brought an action for the increased rent, and, in order to frame its declaration, asked to be allowed to take a copy of the indorsement, and this was ordered by the court. [d] An action was brought on a policy of marine insurance for a constructive total loss. The defendant applied to inspect all the papers relative to the matters in issue, including letters between the captain and the plaintiff, and it was so ordered. [e] An action was brought against a broker for negligence in making a contract, and, on application, the court compelled him to produce his books in order to enable the plaintiff to inspect and take a copy of the contract. [f] Where an agreement was entered into between two persons, of which there was but one copy, the party who retained it held it as trustee for the other, and would be compelled to permit the other to inspect and take a copy of it. Thus, where only one copy of a lease is drawn up and executed, and is delivered to the lessee, the lessor in a suit for the rent may obtain inspection of it; [g] and also where two parties enter into a partnership agreement drawn up and signed by the plaintiff, but remaining in the custody of the defendant. [h]

The practice in the common-law courts at first was to order inspection of a document only where there was but one copy of the document, and the party in whose possession it was, held it as a quasi trustee for the other party. But the word 'trustee' was not strictly construed, nor was it used in any technical sense, and hence it was not long before the rule was extended so as to include every case where the party seeking to inspect had an interest in the document. [i] Therefore it was not essential that there should be an agreement in writing entered into between the parties. Where the agreement consists of a series of letters, or of a written proposal on one side and an oral acceptance on the other, and the writer of the letters, who is sought to be charged with a contract arising out of them has no copies, he has such an interest in them as to give him a right to ask to inspect them and take copies. So of the case of an offer by word of mouth, and an acceptance of it in writing. The writer surely has a right to say, 'Let me see my letter, in order that I may know what contract I have entered into. ' [j]An order for the inspection of a document was always granted where the circumstances called for it; as, where the defendant suggested that it was a forgery or had been altered since it was signed, or made affidavit that he had no recollection of ever having...

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12 cases
  • Dowagiac Mfg. Co. v. Lochren
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • January 31, 1906
    ... ... process of the court is not abused. Wertheim v ... Railroad (C.C.) 15 F. 716. The question as to the ... issues presented in the accounting. Wertheim v. Railway ... Co. (C.C.) 15 F. 716; Johnson Steel-Rail Co. v ... North Branch ... ...
  • In re Moser
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    ...F. 271; U.S. Express Co. v. Henderson, 69 Iowa, 40, 28 N.W. 426; Brown v. Walker, 161 U.S. 591, 16 S.Ct. 644, 40 L.Ed. 819; Wertheim v. Trust Co. (C. C.) 15 F. 716, note on 721.' The note referred to in the last case discusses the use which may be made of the subpoena duces tecum, and does ......
  • State, ex rel. Ozark Cooperage & Lumber Company v. Wurdeman
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    • July 5, 1913
    ... ... State ex rel ... v. Trust Co. (oral opinion of the Supreme Court cited as so ... holding in State ... 40 Cyc. 2168; Winder v. Diffenderffer, 2 Bland ... (Md.), 166; Wertheim v. Railroad, 15 F. 716, 21 ... Blatchf. 246. (5) (a) A subpoena duces ... inf. Crow v. Continental Tobacco Co., 177 Mo. 1, 43, ... 75 S.W. 737. See, also, Ex parte Brown, ... ...
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