Nekoosa-Edwards Paper Co. v. News Pub. Co.

• Decision Date: 03 May 1921
• Parties: NEKOOSA-EDWARDS PAPER CO. v. NEWS PUB. CO. ET AL.
• Court: Wisconsin Supreme Court

174 Wis. 107

182 N.W. 919

NEKOOSA-EDWARDS PAPER CO.

v.NEWS PUB. CO. ET AL.

Supreme Court of Wisconsin.

May 3, 1921.

Appeal from Circuit Court, Wood County; Byron B. Park, Judge.

Action by the Nekoosa-Edwards Paper Company against the News Publishing Company, in which it was sought to examine L. M. Alexander, president of the plaintiff company. From orders ruling on claims of plaintiff and the witness to exemption from self-incrimination, all parties, including the witness, appeal. Affirmed in part and reversed in part.

Plaintiff, a corporation, brought an action against the defendant, a corporation, to recover the purchase price of print paper sold it. Defendant admitted plaintiff's cause of action, but counterclaimed for damages, alleging upon information and belief that plaintiff was one of a number of paper-manufacturing conspirators operating under the name of the “News Print Manufacturers' Association,” and engaged in creating and maintaining a monopoly in print paper and in creating and maintaining exorbitant prices therefor, contrary to the laws of the state and of the United States, and that by reason of such unlawful monopoly defendant was compelled to purchase its print paper from plaintiff at exorbitant prices, to its damage.

The reply put in issue the material allegationsof the counterclaim. Defendant then sought to examine L. M. Alexander, plaintiff's president and other of its officers and servants, under section 4096, as to said unlawful monopoly, and to have him produce all books, papers, etc., showing, or tending to show, the true cost of print paper, and all evidence or data tending to show plaintiff's membership in the “News Print Manufacturers' Association,” the organization thereof, and the conduct of its business.

Plaintiff moved for an order perpetually enjoining the defendant from examining the said witness or any of its officers or servants in regard to said alleged monopoly, and from the production of its books, papers, etc., as called for. The court by an order dated May 19, 1920, denied plaintiff's motion so far as it related to the examination of the witnesses and the production of its books and papers, showing the actual cost of print paper, but granted it so far as it required it to produce evidence or data with reference to its alleged membership in the News Print Manufacturers' Association.

The examination of Mr. Alexander followed, and he refused to answer certain questions as to the cost of print paper on the ground that his answer might tend to incriminate him, and because it might tend to subject him to a penalty, claiming his privilege under the Constitution and laws of this state and of the United States. For like reasons he refused to produce certain books and papers, etc. The same privilege was duly claimed by counsel for plaintiff in its behalf.

Questions relating to plaintiff's connection with the News Print Manufacturers' Association the witness was not required to answer. The commissioner ruled:

“That a corporation is not a person within the meaning of the Constitution of the United States or the Constitution of the state of Wisconsin in this behalf in any way under any circumstances.”

The result was that Mr. Alexander was by the commissioner ordered to be in contempt of court, and to be committed to the county jail till he purged himself. This ruling was affirmed by an order of the court, dated May 28, 1920. The commissioner's ruling that plaintiff need not produce evidence or data with reference to its connection with the News Print Manufacturers' Association was by said order of May 28 likewise affirmed.

The plaintiff appealed from so much of the order of May 19 and the subsequent orders requiring the witness Alexander to be examined as to the cost of print paper and adjudging him in contempt for refusal to answer and holding that a corporation is not a person within the meaning of the immunity grants in our state and federal Constitutions. The defendant appealed from so much of the order of May 19, and subsequent orders as relieved plaintiff from disclosing its connection with the News Print Manufacturers' Association.

Goggins, Brazeau & Goggins, of Wisconsin Rapids, for plaintiff.

Thos. H. Gill, of Milwaukee, for defendant.

VINJE, J. (after stating the facts as above).

A consideration and decision of the questions presented by plaintiff's appeal will also dispose of the question raised by the defendant's appeal.

Plaintiff claims (a) that section 4 of chapter 357, Laws of 1897, now section 1791m, Stats. 1919, granting immunity in certain cases, does not relate to or include private suits between private parties, but relates exclusively to prosecutions by the state to suppress unlawful monopoly; (b) that since it does not affirmatively appear that the statutes of limitation have run on the alleged offenses, and that suits therefor are not now pending, no disclosures can be compelled; and (c) that a corporation has the same constitutional and statutory immunity from self-incrimination that a person has. A determination of the soundness of these claims will dispose of all questions necessarily involved in the appeals.

[1] Chapter 357 of the Laws of 1897 was entitled:

“An act to prevent corporations organized under the laws of this state from entering into any combination, conspiracy, trust, agreement or contract, intended to operate in restraint of any lawful trade or commerce carried on in this state.”

It contains but four sections besides the one providing when it shall take effect. These sections with some amendments now appear as sections 1791j, 1791k, 1791 l, and 1791m, Statutes 1919, under the title Trusts, Pools, and Conspiracies. The first section declares unlawful any conspiracy on the part of a domestic corporation creating a monopoly or controlling prices, and provides for a forfeiture of its charter upon proof thereof. The second section makes it the duty of the Attorney General upon notice, or when he has reason to believe that any corporation has violated any of the provisions of section 1, “forthwith to address to any such corporation, or to any director or officer thereof, such inquiries as he may deem necessary, for the purpose of determining whether or not such corporation has violated any provision of [[[said] section.” It requires that the corporation make prompt answer to such inquiries, and that upon a failure to do so within 60 days, unless time is extended by the Attorney General, it becomes his duty to proceed against the corporation as provided for in the next section, which requires him to bring an action to annul the franchise of the corporation. Then follows the immunity section, which reads:

“No person shall be excused from answering any of the inquiries herein provided for, nor from attending and testifying, nor from producing any books, papers, contracts, agreements or documents in obedience to a subpœna issued by any lawful authority in any case or proceeding based upon or growing out of any alleged violation of any of the provisions of section 1791j, or of any law of this state in regard to trusts, monopolies or illegal combinations on the ground of or for the reason that the answer, testimony, evidence, documentary or otherwise, required of him may tend to criminate him or subject him to a penalty or forfeiture; but no person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he may answer, testify or produce evidence, documentary or otherwise, in obedience to any request under these provisions or any subpœna, or either of them, in any case or proceeding, except that the charter of any corporation may be vacated and its corporate existence annulled as hereinbefore provided, and except further, that no person testifying in any case or proceeding aforesaid shall be exempt from punishment for perjury committed in so testifying.”

It is quite apparent that the whole scheme of the chapter and the section of the statutes as amended concerns prosecutions by the state for a violation of section 1791j, or of any other law of the state relative to trusts. All the sections were enacted in one act and relate to state control over trusts. The words of section 1791m that, “No person shall be excused from answering any of the inquiries herein provided for,” clearly refer to inquiries propounded by the Attorney General as required by section 1791k. And the words in the latter part of section 1791m, “except that the charter of any corporation may be vacated and its corporate existence annulled as hereinbefore provided,” also show that a state proceeding is contemplated. In addition to the reasonably clear import of the sections gathered from their language, there is the further reason that the immunity granted by section 1791m should be permitted only at the option of the state. To allow it to be invoked in private suits involving perhaps only a small sum in damages or in penalties would result in granting immunity baths to corporations at the instance of private parties, perhaps friendly parties, and thus prevent the state from proceeding against them for violations of trust laws.

Not only the language of the sections and the reason above suggested lead to the conclusion that the immunity relates only to state proceedings, but decided cases in other jurisdictions strengthen it for the reason that in all cases called to our attention where the privilege has been denied it has been in cases where the sovereign has exercised its visitorial powers or in cases for the enforcement of penalties where the state has expressly granted immunity. That the offense charged in the counterclaim is one that comes within the constitutional privilege there can be no doubt. Karel v. Conlan, 155 Wis. 232, 144 N. W. 266, 49 L. R. A. (N. S.) 826.

[2] It appears from the counterclaim that February 15, 1917, is the date of plaintiff's last transaction with the...