Puget Sound Nav. Co. v. Associated Oil Co.

• Decision Date: 16 February 1932
• Docket Number: No. 892.,892.
• Citation: 56 F.2d 605
• Parties: PUGET SOUND NAV. CO. v. ASSOCIATED OIL CO.
• Court: U.S. District Court — Western District of Washington

56 F.2d 605 (1932)

PUGET SOUND NAV. CO. v. ASSOCIATED OIL CO.

No. 892.

District Court, W. D. Washington, N. D.

February 16, 1932.

Bogle, Bogle & Gates, of Seattle, Wash., for complainant.

Eggerman & Rosling, of Seattle, Wash., for defendant.

NETERER, District Judge.

A bill of discovery has been filed, alleging, in substance, that the defendant is seeking to recover from the complainant a large sum of money for sale of fuel oil, and counterclaim has been filed claiming a large sum by reason of overpayment on fuel oil purchased by reason of stipulation in the contract providing, in substance, that, if at any time the oil company should sell to any owner or operator of steamships oil at a lesser rate for a period of six months or more, for delivery at stated places, then the price to the complainant would be reduced to such lower sum, that the oil was sold to various and sundry parties for a less price, and that the complainant is unable to prepare his defense and counterclaim, unless the contracts are available for inspection before trial and discovery of facts which are necessary to such issue.

The defendant has moved to dismiss for the reason that, by the interrogatories propounded and the discovery demanded, they do not involve documents or evidence pertinent to the issue presented by the law case, and that complainant has adequate legal remedy by way of motion to require the production of all documents and evidence pertinent to the issue at law and by way of deposition de bene esse. It relies upon section 724, Rev. St. (28 USCA § 636), as a legal remedy available.

This court in Massey v. United States, 46 F.(2d) 78, held that, in the interest of economy of time and expedition of the work of the greatly congested calendar of the federal courts, inspection should be encouraged before trial to the end that no delay for examination at the trial will be occasioned. The right of the plaintiff in that case was predicated upon World War Veterans' Act § 30 (38 USCA § 456), which gave to the plaintiff a special privilege, and the court permitted inspection before trial. This was approved by the Circuit Court of Appeals of the Sixth Circuit in the Third National Bank & Trust Co. v. United States, 53 F.(2d) 599, which cited that case with approval, while it has no application here, save and except as it does have relation to the economy of judicial procedure. In that case, as here, the adverse party asserted the sufficiency of section 724, supra.

Discovery is an equitable procedure for the discovery of facts to assist parties in another suit or court. At common law parties to an action were incompetent as witnesses, and an adverse party could not be compelled to produce documents material to the issue for use on trial. Courts of equity assumed and asserted inherent power and developed the procedure for bill of discovery. To invoke this right, it must show a cause of action, and in this it is distinguished from a "fishing bill," which shows no cause of action and seeks disclosure by the adversary of facts to support suit. The distinction between bill for relief and bill for discovery is: In the former, relief is sought in the same bill; and, in the latter, aid in another proceeding is sought. The complainant clearly states a cause for relief in its counterclaim in the law case, and, in this case, good reason for discovery of facts. The complainant has a contract and has paid under the contract sums of money, it charges, in excess of the stipulated amount by reason of the defendant selling fuel oil to others at a lesser rate, and it is...