Lang v. Morgan's Home Equipment Corp.

• Decision Date: 12 February 1951
• Docket Number: No. A--77,A--77
• Citation: 6 N.J. 333,78 A.2d 705
• Parties: LANG v. MORGAN'S HOME EQUIPMENT CORP.
• Court: New Jersey Supreme Court

Page 333

6 N.J. 333

78 A.2d 705

LANG v.MORGAN'S HOME EQUIPMENT CORP.

No. A--77.

Supreme Court of New Jersey.

Argued Jan. 29, 1951.

Decided Feb. 12, 1951.

Harry Weltchek, Elizabeth, argued the cause for the appellant(Weltchek & Weltchek, Elizabeth, attorneys).

Irving Morris, Newark, argued the cause for the respondent(Robinson & Morris, Newark, attorneys).

The opinion of the court was delivered by

VANDERBILT, C.J.

From a judgment of the Essex County Court dismissing the defendant's counterclaim for failure to comply with an order to produce certain books and records the defendant took an appeal which we have certified on our own motion.

The plaintiff instituted this action against the defendant to recover commissions and salary alleged to be due him for services rendered in 1947 and 1948, when he was employed as the manager of the defendant's Newark office.The defendant filed a counterclaim seeking to hold the plaintiff responsible for alleged shortages in the amount of $12,887.96.Subsequently the plaintiff served interrogatories on the defendant for the purpose of obtaining, among other things, information with respect to inventories at the Newark branch during the years in question.The defendant answered certain of the interrogatories, but as to others merely stated that they were 'improper' without any attempt to comply with Rule 3:33, which provides in part: 'Within 10 days after service of interrogatories a party may serve written objections thereto together with a notice of the hearing of the objections at the earliest practicable time.Answers to interrogatories to which objection is made shall be deferred until the objections are determined.'

Thereafter the plaintiff moved the court to suppress the answer and to dismiss the counterclaim on the ground of the defendant's failure to answer the interrogatories.Instead, on September 13, 1949, the court entered an order requiring the defendant to answer the interrogatories and providing: 'It is further ordered that the defendant permit the plaintiff to make an examination of defendant's books and all of its records relative to all sales made and collected by the defendant through its office in Newark, New Jersey, for the years 1947 and 1948, and the books and records of the defendant relative to any inventories taken by the defendant during the years 1947 and 1948, said examination to be held at the place of business of the defendant at Newark, New Jersey, upon the attorneys for the plaintiff giving 7 days' notice of their desire to examine said books and records, * * *'

In accordance with this order the plaintiff gave notice of his desire to examine the defendant's books and records on June 27, 1950, at its Newark office.On that date the plaintiff's counsel attended at the defendant's place of business in Newark, but no books and records relating to the inventories of 1947 and 1948 were produced by the defendant.On the contrary, in defiance of the order counsel and an officer of the defendant stated that the documents would be made available only in Boston.

On July 31, 1950, the plaintiff moved the court for an order suppressing the counterclaim and answer and for such other relief as might be proper in the circumstances, basing the application on the defendant's refusal to comply with the quoted order of September 13, 1949.The judge hearing the motion conferred during the argument with the judge who had granted the order and subsequently on August 2, 1950, entered judgment dismissing the counterclaim.Two days thereafter further argument was had on the defendant's objection to the form of the judgment.At this hearing the defendant's argument to the effect that it had not construed the order of September 13, 1949, to include a recapitulation prepared by its accountants of the 1947 and 1948 inventories together with supporting documents was cut short by the court, since that question had been argued at length at the hearing on the motion.The court did state, however, that while the defendant had failed to obey the order its conduct was not contumacious.The defendant's contention that the judgment was broader than the motion was rejected and the court held that no valid reason appeared as to why the judgment should be altered.

The defendant appealed from the judgment dismissing its counterclaim and thereafter served a statement in lieu of record upon the plaintiff.To this the plaintiff did not respond, but filed his own statement of the facts.The court accepted neither of these statements, but instead prepared its own statement of the facts which it certified as the record to be used on appeal.The defendant then applied to the Appellate Division of the Superior Court for an order directing that the statement of facts as prepared by the court be struck and that the statement of facts as submitted by the defendant constitute the record on appeal without modification.This motion of the defendant was denied by the Appellate Division.

This appeal challenges the validity of the judgment dismissing the defendant's counterclaim for failure to comply with the order for discovery of its books and records.

Liberal procedures for discovery in preparation for trial are essential to any modern judicial system in which the search for truth in aid of justice is paramount and in which concealment and surprise are not to be tolerated.In Hickman v. Taylor, 329 U.S. 495, 500--501, 67 S.Ct. 385, 388, 91 L.Ed. 451, 457(1947) it was said: 'The pre-trial deposition-discovery mechanism established by Rules 26 to 37 is one of the most significant innovations of the Federal Rules of Civil Procedure.Under the prior federal practice, the pre-trial functions of notice-giving, issue-formulations and fact-revelation were performed primarily and inadequately by the pleadings.Inquiry into the issues and the facts before trial was narrowly confined and was often cumbersome in method.The new rules * * * invest the deposition-discovery process with a vital rule in the preparation for trial.The various instruments of discovery now serve (1) as a device, along with the pre-trial hearing under Rule 16, to narrow and clarify the basic issues between the parties, and (2) as a...