Simon v. American Tobacco Co.

• Citation: 192 F. 662
• Parties: SIMON et al. v. AMERICAN TOBACCO CO. et al.
• Decision Date: 08 December 1911
• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

192 F. 662

SIMON et al. v. AMERICAN TOBACCO CO. et al.

United States Circuit Court, S.D. New York.

December 8, 1911

On Rehearing, January 2, 1912.

Samuel J. Rawak, for plaintiff.

Nicoll Anable, Lindsay & Fuller, for defendant American Tobacco Co.

Goldsmith Cohen, Cole & Weiss, for defendant Metropolitan Tobacco Co.

WARD Circuit Judge.

This is an action at law under section 7 of the Sherman anti-trust law (Act July 2, 1890, c. 647, 26 Stat. 210 (U.S. Comp. St. 1901, p. 3202)) to recover treble damages against two domestic corporations, defendants. The complaint is verified and, the defendants having served unverified answers, the plaintiff returned them on the ground that they were not verified by an officer, as required by section 525, subd. 1, of the Code of Civil Procedure of the state of New York. The defendants now move that the plaintiff be compelled to accept the answers.

Section 523 of the Code of Civil Procedure provides that the verification may be omitted 'where the party pleading would be privileged from testifying as a witness concerning an allegation or denial contained in the pleading. ' In an action in the federal courts the immunity which deprives a witness of the privilege of not incriminating himself must be given by the federal law. Jack v. Kansas, 199 U.S. 372, 26 Sup.Ct. 73, 50 L.Ed. 234.

Congress in the act of June 30, 1906, has provided that:

'Immunity shall extend only to a natural person who in obedience to a subpoena gives testimony under oath or produces evidence, documentary or otherwise, under oath. ' U.S. Comp. St. Supp. 1909, p. 1168.

This does not seem to apply to a person verifying a pleading (U.S. v. Sanitary Mfg. Co. (D.C.) 187 F. 229), so that neither a corporation nor an individual has any immunity if it does so.

The law of New York requiring the answer of a domestic corporation to be verified by one of its officers must be followed in the federal courts in actions at law. St. Louis Railway Co. v. Knight, 122 U.S. 79, 96, 7 Sup.Ct. 1132, 30 L.Ed. 1077. Doubtless an officer of a corporation may decline to verify the company's answer in an action at law in this court on the ground that his doing so would tend to incriminate him. But the fact that one or all of the officers of the company would be incriminated if they verified the answer and are given no immunity will not relieve it of the requirement that its answer must be verified. It must select an officer to do so who will not be incriminated, and if there is no such officer must provide one.

The practice does prevail in the state courts of New York to serve unverified answers of corporations in libel cases, though the complaint is verified. There are but two decisions on the subject, and they are at Special Term, one in 1888, Goff v. Star Printing Co., 21 Abb.N.C. 211, and Batterman v. Journal Co., 28 Misc.Rep. 375, 59 N.Y.Supp. 965, in 1899. This practice enables the corporation to deny as matter of pleading, and so to compel the plaintiff to prove, what it might have to admit if its answer were verified.

But the Supreme Court of the United States, in Hale v. Henkel, 201 U.S. 43, 70, 74, 26 Sup.Ct. 370, 50 L.Ed. 652, and Wilson v. United States, 221 U.S. 361, 382-384, 31 Sup.Ct. 538, 55 L.Ed. 771, has held that the privilege against self-incrimination is personal to a witness and cannot be availed of by a corporation so as to withhold its books, correspondence, and accounts or to close the mouths of its servants and agents as witnesses. Obviously, if corporations could do this, they would be enabled entirely to defeat investigations under the interstate commerce act and the Sherman anti-trust law.

The motion is denied.

On Rehearing.

A rehearing of the motion to compel the defendants to serve a verified answer has been granted at their urgent solicitation. I will consider first certain criticisms upon the opinion heretofore handed down before reconsidering it on the merits.

It is intimated by defendants that the court's suggestion that a corporation which has no officer who can verify its answer without tending to incriminate himself, and who is willing to do so, should elect one who can is immoral. Why? It can hardly be assumed that a corporation in such case (which, indeed, is very hard to imagine) ought to submit to a judgment by default if it has a defense. On the contrary, it would seem to be clearly its duty to elect an officer who can verify its answer without incriminating himself.

Next they say that such an officer would be a dummy, elected to deceive the court and evade the law. I assume exactly the contrary, namely, that such an officer is elected because he can verify without incriminating himself, and that the corporation will not ask him to verify a false answer, and, that if it...