Kentucky Finance Corporation v. Paramount Auto Exchange Corporation

• Decision Date: 11 June 1923
• Docket Number: No. 17,17
• Citation: 67 L.Ed. 1112,43 S.Ct. 636,262 U.S. 544
• Parties: KENTUCKY FINANCE CORPORATION v. PARAMOUNT AUTO EXCHANGE CORPORATION
• Court: U.S. Supreme Court

262 U.S. 544

43 S.Ct. 636

67 L.Ed. 1112

KENTUCKY FINANCE CORPORATION

v PARAMOUNT AUTO EXCHANGE CORPORATION.

No. 17.

Argued Oct. 5, 1922.

Decided June 11, 1923.

Messrs. Albert K. Stebbins and Jackson B. Kemper, both of Milwaukee, Wis., for plaintiff in error.

Mr. Walter H. Bender, of Milwaukee, Wis., for defendant in error.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

The plaintiff in error, a Kentucky corporation, brought an action of replevin in a state court at Milwaukee, Wis., against the defendant in error, a Wisconsin corporation, to recover an automobile; the right of recovery asserted in the complaint being put on the ground that the plaintiff was the owner and entitled to the possession of the automobile, that one Allen had unlawfully taken it from the plaintiff's possession at Louisville, Ky., had fraudulently removed it to Milwaukee and had there wrongfully delivered it to the defendant and that the defendant was unjustly withholding it from the plaintiff under some groundless claim derived from Allen. The defendant appeared and obtained from the court an order requiring the plaintiff's secretary, who resided at Louisville and was in the plaintiff's service there, to appear in Milwaukee at a fixed time before a designated court commissioner, to bring with him all papers, files, and records of the plaintiff which were under his control and relevant to the controversy, and then and there to submit to an examination by the defendant. The order was sought and granted on the ground that the examination would better enable the defendant to plead to the complaint, which as yet it had not done. The plaintiff was not engaged in any business in Wisconsin, nor had it complied with the law of that state prescribing conditions on which it might do so. It had no property in the state other than the automobile, and it had gone into the state only for the purpose of instituting and prosecuting the action to repossess itself of that vehicle. Its secretary was not within the state; nor did it have any representative there, other than the attorneys who were prosecuting the action in its behalf. For itself and its secretary it consented that such an examination as was sought might be had at Louisville, at any time and before any officer the court might designate, but it objected to any order requiring that the examination be had in Milwaukee. The objection was overruled, and the court put in the order a direction that the defendant tender to the plaintiff for its secretary the railroad fare from the southern boundary of Wisconsin to Milwaukee and return, being $4.74, and one day's witness fee, being $1.50. The tender was made and declined, and the secretary, with the plaintiff's approval, refused to comply with the order. Becuase of this the court, on the defendant's motion and over the plaintiff's objection, made a further order striking the plaintiff's complaint from the files and dismissing its cause of action, with costs. On appeal to the Supreme Court of the state, both orders were sustained over the plaintiff's contention that they and the statute under which they were made violate the due process and equal protection clauses of the Fourteenth Amendment. 171 Wis. 586, 178 N. W. 9. To obtain a review of the judgment of the Supreme Court the case was brought here on writ of error under section 237 of the Judicial Code (Comp. St. § 1214).

Th statutory provisions whose validity is questioned are parts of a procedural measure, embodied in the 1917 edition¹ of the Wisconsin Statutes, abrogating prior modes of obtaining a discovery under oath and providing for an adversary examination of a 'party, his or its assignor, officer, agent or employe, or of the person who was such officer, agent or employe at the time of the occurrence' involved—the examination to be had at any time after the case is begun and to take the form of a deposition 'upon oral interrogatories' and be transmitted to the court like other depositions. The provisions in question are subdivision 7 of section 4096 and subdivision 2 of section 4097, which read as follows:

'In case a foreign corporation is a party, the examination of its president, secretary, other principal officer, assignor or agent or employe, or the person who was such, or either of them, at the time of the occurrence of the facts made the subject of the examination, may be had under the provisions of this section in any county of this state. The court may also, upon motion and such terms as may be just, fix a time and place in this state for such examination of any of said persons. Such persons so sought to be examined as aforesaid shall attend at such time and place and submit to the examination, and then and there have with him all papers, books, files, records, things, and matters in the possession of such person by reason of his relation to such corporation, relevant to the controversy. Such person sought to be examined as aforesaid shall attend at such time and place and submit to the examination, and, if required, attend for the purpose of reading and signing such deposition, without service of subpoena.'

'If any officer, agent or employe, or any person who was such officer, agent, or employe of a foreign corporation, at the time of the occurrence of the facts made the subject of the examination, be lawfully required to appear and testify, as provided in this chapter, either within or without the state, * * * shall refuse and neglect to have with him any papers, books, files, records, things, and matters in the possession of such party relevant to the controversy, such party may be punished as for a contempt and in the discretion of the court, the pleading of such foreign corporation stricken out, and judgment given against it as upon default or failure of proof.'

When the order for the examination was made, other parts of the statute, applicable to all suitors other than foreign corporation, provided, notably subdivisions 3 and 6 of section 4096, that where the party against whom the examination was sought was a resident of the state the examination could be had only in the county of his residence, and where the party was a nonresident the examination could be had in the state only if he could be personally served therein with notice and subpoena, and then only in the county where such service was had. In George v. Bode, 170 Wis. 411, 175 N. W. 939, the Supreme Court of the state held that an examination within the state could not be ordered against a party, other than a foreign corporation, residing outside and on whom personal service could not be had therein, the court saying in that connection:

'The examination may be taken in this state if he can be personally served with notice and subpoena; the inevitable inference is that it is only if he can be served that he can be so examined. If the provisions of subdivision 3 mean that the court might fix a time and place for his examination within this state regardless of the personal service of notice and subpoena, then the provisions of subdivision 6 regarding nonresidence would be wholly unnecessary. These considerations move us to construe the statute as not empowering the court to order the examination of a nonre ident to take place within this state when he cannot be personally served with notice and subpoena.'

By subdivision 7 of section 4096, before quoted, an exception was made as to foreign corporations whereby examinations within the state might be ordered and compelled against them...