Mathieson Alkali Works v. Arnold, Hoffman & Co., Inc.

• Decision Date: 03 May 1922
• Docket Number: 129.
• Citation: 280 F. 132
• Court: U.S. District Court — District of Rhode Island
• Parties: MATHIESON ALKALI WORKS v. ARNOLD, HOFFMAN & CO., Inc.

280 F. 132

MATHIESON ALKALI WORKS v. ARNOLD, HOFFMAN & CO., Inc.

No. 129.

United States District Court, D. Rhode Island.

May 3, 1922

Huddy Emerson & Moulton, of Providence, R.I., and Rushmore, Bisbee & Stern, of New York City, for plaintiff.

Edwards & Angell, of Providence, R.I., and Hughes, Rounds, Schurman &amp Dwight, of New York City, for defendant.

BROWN District Judge.

While it is the ordinary rule not to interrupt proceedings before a master by interlocutory applications for review of his rulings, for the reason that such a practice is likely to be productive of great delay, and because it is difficult for a judge to decide an isolated point without examination of a large part of the record (Union Sugar Refining Co. v Mathiesson, 3 Cliff. 146, 151, 153, 154, Fed. Cas. No 14,398), yet the ordinary rule is subject to exception when the decision of some question of fact or law may be of practical assistance in limiting the scope of further proceedings before the master.

The plaintiff has made application for a production of documents covering a very long period of time, and relating to the details of transactions which the defendant contends are finally closed and not open to re-examination.

The defendant asks that the master be instructed to try the defense of accounts stated and of acquiescence, claiming that a decision in its favor upon this question would dispose of the plaintiff's claim to production of documents and further discovery.

From an examination of the extensive briefs, in which are discussed the authorities relating to discovery, as well as the evidence already before the master, it is apparent that a principal question in the case is whether, as matter of fact, the transactions between the plaintiff and defendant corporations were conducted entirely through the agency of officers acting at the same time for both corporations. If this is the fact there is a strong presumption against their validity, and the burden is upon those who would maintain the transactions to show their entire fairness. Geddes v. Anaconda Mining Co., 254 U.S. 590, 599, 41 Sup.Ct. 209, 65 L.Ed. 425; Corsicana National Bank v. Johnson, 251 U.S. 68, 90, 40 Sup.Ct. 82, 64 L.Ed. 141. If it appears that there was a dual agency, as alleged, this may open up a wide range of inquiry into the fairness of accounts that have been rendered. A settlement or acceptance of accounts rendered requires independent representation of the party to whom they are rendered. On the other hand, if this is not the fact-- if, in the dealings between the two corporations there was independent representation and independent action of both-- then the defendant's objections to discovery or production of documents, if now disposed of, may materially shorten the hearings before the master.

As the plaintiff asserts a right to production on the ground that the relation of the parties was that of principal and agent, it becomes necessary to determine, as matter of fact, the extent of this relation.

The contracts, Exhibits A and B, which are not questioned, relate to two distinct topics: First, a sales agency; and, second, the purchase by the defendant of products for the purpose of reselling the same for its own account. Here are established two relations-- buyer and seller, and principal and agent. Under Exhibits A and B the defendant was not authorized to fix prices either upon its sales as agent or upon purchases on its own account.

The relation of buyer and seller is not a fiduciary relation. The scope of the defendant's sales agency is limited in subject-matter to...