Phillips v. Interstate Hosiery Mills, Inc.

• Decision Date: 27 October 1932
• Citation: 162 A. 886
• Parties: PHILLIPS et al. v. INTERSTATE HOSIERY MILLS, Inc., et al.
• Court: New Jersey Court of Chancery

162 A. 886

PHILLIPS et al.

v. INTERSTATE HOSIERY MILLS, Inc., et al.

Court of Chancery of New Jersey.

Oct. 27, 1932.

Syllabus by the Court.

1. A court of equity, quite independent of any statutory authority, possesses inherent power to require either of the parties to a cause therein pending to give to the other an inspection and copy, or permission to take a copy, of such books and paper as the adverse party may have in his custody, control, or possession; when such are relevant to and evidential of the merits of the suit or the defense thereto.

2. While the right to inspect private books and papers is often an important one in the due and orderly administration of justice; nevertheless, its exercise may, in some instances be of such portentous character that it should always be circumscribed with all expedient safeguards so as to secure, as far as possible, against its abuse, and against its being converted into an instrumentality subversive of rather than subservient to the ends of justice, the furtherance and accomplishment of which it was designed and intended for.

3. The right of inspection was neither designed nor intended, and therefore should not be permitted, to be exercised, except in a proper case, upon a proper showing, and then only with due regard for and rigid observance of the constitutional rights of persons to be secure from unreasonable search and seizure.

4. A court of equity should decline to grant a roving commission for the production or inspection of books and records, under the sanction of which its recipient may, with impunity, ransack them and thus delve into the most intimate affairs and private business of his opponent, in the hope that he, perchance, may find therein or glean therefrom some evidence or information upon which he ultimately hopes to be able to substantiate his action or his defense thereto.

5. No valid order for an inspection of books and records can or should be made unless a duly verified petition, stating the grounds thereof has first been filed, followed by due opportunity to the adverse party to be heard thereon, and then only upon the applicant's demonstration of good and sufficient cause therefor.

6. The petition for an inspection should, amongst other things, state such facts and circumstances from which the court can Quite independent of and aside from the petitioner's conclusions and oath with respect thereto, judge for itself of the materiality of the evidence sought and the propriety of granting or denying the application therefor made.

7. Interrogatories should not seek the names of witnesses, should not be impertinent or vexatious in character, should relate to the case of the party propounding them, and not be designed for the purpose of prying into his adversary's case, and should be of such a character that with a responsive answer they would constitute relevant, material, and competent evidence on behalf of their proponent.

Suit by Jacob A. Phillips and others against the Interstate Hosiery Mills, Inc., and others. On application by the complainants for an order permitting the inspection and copying of certain books, records, and documents in the custody and control of the defendants, and on defendants' motion to strike out certain interrogatories propounded and addressed to each of them respectively.

Order in accordance with opinion.

Heine & Laird, of Newark, for complainants.

Pitney, Hardin & Skinner, of Newark, for defendant.

Martin & Reiley, of Newark, for defendant Lawrence H. Greenwald.

LEWIS, Vice Chancellor.

Issue having been joined between complainants and the only answering defendants, Interstate Hosiery Mills, Inc., and Lawrence H. Greenwald, complainants now seek an order directing these defendants to give them an inspection and copy, or permission to take a copy, of the numerous books, appraisals, audits, reports, documents, and other papers referred to in the petition whereon the present application is predicated. This application is, however, met with vigorous resistance on the part of the said defendants who, at the same time, move to strike out the interrogatories propounded and addressed to each of them respectively.

Complainants' application appears to be based upon Rules 86 and 87 (Edition of 1930) of this court. But a court of equity, quite independent of any statutory authority, possesses inherent power to require either of the parties to a cause therein pending to give to the other an inspection and copy, or permission to take a copy, of such books and papers as the adverse party may have in his custody, control, or possession, when such are relevant to and evidential of the merits of the suit or the defense thereto. The citation of authority, an abundance of which exists, in support of this wholesome and well-settled principle, the existence of which is of almost equal antiquity with that of the very court itself, can here serve no useful purpose.

While the right to inspect private books and papers is often an important one in the due and orderly administration of justice, nevertheless, its exercise may, in some instances, be of such portentous character that it should always be circumscribed with all expedient safeguards, so as...