Potter v. Beal, 20.

• Decision Date: 11 June 1892
• Docket Number: 20.
• Citation: 50 F. 860
• Parties: POTTER v. BEAL et al.
• Court: U.S. Court of Appeals — First Circuit

50 F. 860

POTTER v. BEAL et al.

No. 20.

United States Court of Appeals, First Circuit.

June 11, 1892

without adequate remedy at law, and therefore seeks the interposition of equity. The relief sought is (1) an order that the books, papers, and other documents be delivered to plaintiff; (2) that defendant Beal be enjoined from using the same before the grand jury; and (3) such other relief as may be just.

At a preliminary hearing Frank D. Allen, the United States district attorney, appeared on behalf of the government. At this hearing, which was merely on the evidence contained in the sworn bill, the prayer for a preliminary injunction was denied, and the receiver was directed to lodge the trunk with the clerk of the court, who was ordered to keep the same in its then condition until otherwise ordered. Afterwards the district attorney, on his own petition, and against plaintiff's objection, was made a party defendant, and filed a motion that the trunk be opened and delivered to the government and the grand jury, in order that all material evidence therein contained might be used in the investigation. The receiver thereafter filed his answer alleging that the trunk came into his possession as a part of the assets of the bank; that he is advised and believes that it is his duty to examine its contents, and ascertain whether it contains property of the bank, or memoranda, books papers, or accounts concerning its affairs. Whereupon plaintiff asked for a further hearing, that evidence might be introduced as to the nature of his possession. This hearing was had February 23, 1892, and plaintiff called one Work, a cashier, whose evidence tended to show that the trunk was kept in the bank, and not elsewhere, as the private trunk of Mr. Potter, but the witness had no knowledge of its contents that Mr. Potter and one Kellogg, the clerk of the bank, and a secretary to Mr. Potter, and no other persons, had access to the trunk. Neither Mr. Potter nor Kellogg was called as a witness. It appeared also that the trunk, while in possession of the receiver, was opened several times by agreement, and there were taken out certain insurance policies on Mr. Potter's house, as well as certain deeds of Florida lands which one Hanson held in trust as security to certain notes held by the bank. At these times Mr. Edward W. Hutchins, counsel for the receiver, was present. He was called as witness by plaintiff, and on cross-examination stated that he then saw into the trunk, and obtained some knowledge of its contents. He was then asked to state what were some of its contents, but the question was objected to and ruled out, and he was allowed to make no statement of its contents, though he testified that on those occasions he, as well as the receiver, took part in the examination of the trunk without any objection, so far as he knew. After the conclusion of this hearing, on February 25, 1892, the court delivered an opinion, which is reported in 49 F. 793, and made the following order:

'With a view of ascertaining the rights of the parties to this bill in a manner not unreasonable and not in conflict with the provisions of the constitution, it is ordered that Hon. John Lowell, of Boston, be, and he hereby is, appointed master to examine the contents of the trunk referred to in said bill. That Mr. Howe, of counsel, pass the key to the clerk of this court, and that the clerk open the trunk in the presence of the master and no other person; and that, after examination by the master, in the presence of no one, such papers, documents, and other things, if any, as are the property of the Maverick Bank, and are not material to the issue suggested in the motion of the district attorney in this matter, after being first shown to the plaintiff, be delivered to the defendant Beal by the clerk. Second. That such, if any, as are private, and are not the property of the Maverick Bank, together with such as do relate to Maverick Bank transactions, and are necessary and material to be introduced by Mr. Potter in his own behalf, be forthwith delivered to his counsel, Mr. Howe. Third. That such, if any, not included in the clauses above, as relate to Maverick Bank transactions, and in the judgment of the master are or may be material to the issue suggested in said motion of the district attorney and the proper presentment of the government's case, be sealed, returned to the trunk and the safe custody of the clerk, and that the clerk relock the trunk and such contents until further directed. That the master, without further characterization, report whether or not he finds papers and documents within the classes named, and what disposition has been made thereof. The examination contemplated by this order is to be considered as part of the preliminary hearing, or, in other words, in aid thereof, and is designed to enable the parties to lay evidence before the court in a private and reasonable manner, the nature of the case being such that it would be unreasonable to ask or permit it to be done in a public manner. Upon report, the parties will be further heard as to the proper use and disposition of such, if any, papers and other things as are material to the government's case. The examination herein provided for is to be private, and no publicity whatever is to be given to it except such as is conveyed through the report of the master, of the character indicated. Before the examination contemplated by this order, the parties and their counsel may, in the presence of each other, or separately, if they so agree, make such explanation to the master as they desire as to the character of the papers, and until such examination and report, or until the foregoing order is vacated or modified, all parties are strictly enjoined from interfering in any way with the trunk or its contents.'

From this order, plaintiff took the present appeal.

Henry D. Hyde, M. F. Dickinson, Jr., and Elmer P. Howe, for appellant.

Edward W. Hutchins, Henry Wheeler, and Frank D. Allen, for defendant Beal.

Frank D. Allen, U.S. Atty., pro se.

Before COLT and PUTNAM, Circuit Judges, and NELSON, District Judge.

PUTNAM Circuit Judge.

The order of the circuit court provides that, without proof, and without hearing the parties, except the explanation authorized by it, the master shall make a secret, private examination of the contents of the trunk in question in this case; not for informing the court or counsel, but for distribution. He is directed to divide the contents into three parts, delivering one to complainant, one to the original defendant, Beal, and returning the third into court for the purpose of further consideration. This so clearly violates the constitutional and fundamental rights of litigants as to the method of trial, that it is to be presumed the learned judge who entered the order had reason to understand it would be accepted by all interested as a matter of convenience; though to provide for all contingencies, he, both in his opinion and by a special order, reserved the rights of all parties till they could be passed on by this court.

The first question which meets us is whether this appeal shall be regarded as from an injunction granted by an interlocutory order under the seventh section of the act establishing this court, or whether it is to be taken hold of as from a final decree. The record states that the order was preliminary but, of course, this is not effectual, as it is for this court, and not for the circuit court, to determine that question in all cases, and the determination is to be governed by the essence of what is done, and not by the appellation given to it. If this is to be regarded as an appeal under the seventh section, there might yet be some matters concerning which this court could take jurisdiction, as, for instance, the fact that the injunction order holds the papers after they pass from the custody of the court; but it may be doubted whether we can be given jurisdiction by an injunction entered under color for that purpose, or by one purely nominal, concurrent with proceedings before a master, or the appointment of a receiver, or the impounding of papers or moneys pending litigation, if as effectual without the injunction as with it. The power of the circuit court to control proceedings before a...