Southern Ry. Co. v. North Carolina Corporation Commission

• Decision Date: 11 April 1900
• Citation: 104 F. 700
• Parties: SOUTHERN RY. CO. et al. v. NORTH CAROLINA CORP. COMMISSION et al.
• Court: U.S. Court of Appeals — Fourth Circuit

104 F. 700

SOUTHERN RY. CO. et al. v. NORTH CAROLINA CORP. COMMISSION et al.

United States Circuit Court, E.D. North Carolina.

April 11, 1900

On questions certified to the court by the master as follows:

'To His Honor, Judge Simonton: The question under consideration being of very great importance, it is agreed by counsel that it be certified to your honor, waiving any points as to procedure. And the standing master hereby certifies the same to your honor; that is to say, whether the said books should be ordered to be produced for the purposes mentioned in the annexed copy ofthe proceedings marked 'A.' Inasmuch as a recess is necessitated by reason of the foregoing, the standing master respectfully asks instructions upon an additional question; that is to say, whether testimony tending to show that the defendant commission has not assessed the complainant's property at its full value is admissible. The point is illustrated by the annexed extract from the proceedings, marked 'B.' Your honor's decision upon these questions will greatly facilitate the hearing before me.

'Respectfully submitted, James E. Shephard, Standing Master.'

'A.

'Mr. Henry Savage, being called by the complainants, being duly sworn, was examined as follows: 'Q. 1. Your name is Henry Savage? Ans. Yes, sir. Q. 2. What is your age, residence, and occupation, Mr. Savage? Ans. I will be 66 next month. Residence, Wilmington, N.C. My occupation is secretary and treasurer of the Acme Manufacturing Company, Limited. Q. 3. It is a corporation? Ans. Yes, sir. Q. 4. How long have you been secretary and treasurer? Ans. I think I have held that position since '91. Q. 5. Do you keep books showing your gross earnings and operating expenses? Ans. Yes, sir. Q. 6. Have you those books with you? Ans. No, sir. Q. 7. Have you been subpoenaed to produce them? Ans. Yes, sir. Q. 8. Will you produce them? Ans. On the advice of counsel, I decline.' The court requested counsel to state the purpose for which they demanded the production of the books. Counsel for the complainants state that the purpose is to show by the books of the corporation the true value of the plant and property of this corporation on the 1st day of June 1899, and for a number of years previous thereto, and to show that the assessed value of taxation is at least 25 per cent. less than the true value of the plant, including real estate; and, further, to enable the witness to refer to said books and inform the court as to the gross earnings and operating expenses of said corporation for the year 1899 and for several years previous thereto, so as to ascertain the true value of the plant of said corporation, including its real estate; and, further, to show that, if the said corporation were assessed in accordance with the manner of assessing railroad companies prescribed by the tax law of 1899 of the state of North Carolina, such corporation would be assessed at a much higher value than it has been for several years past and was on June 1, 1899. Counsel for complainants requested the court to order witness to produce the books. Counsel for defendants object to the order and to the production of the books and papers named in the subpoena duces tecum, on the ground that the same are irrelevant and incompetent, and are not admissible in evidence if produced, and upon the further ground that the entries which may be contained in such books are not competent evidence against the defendants. At this point counsel for witness, Messrs. E. S. Martin, E. K. Bryan, and Cameron Morrison, were allowed to appear for the purpose of moving that the subpoena duces tecum be recalled, and that witness be not ordered to produce the books over his objection, and argued same.'

'B.

''Ques. State the par value of an original share of the capital stock of the Wilmington & Weldon Railroad Company. State what certificates of indebtedness or of stock in other corporations or other additions have been made thereto, or issued to the holders thereof. State the present market value of share of stock of said corporation, with such additions as have been made thereto.' (Complainants object to this question, because no such issues as are indicated by said question are raised by the pleadings. The value of the stock, etc., of the Wilmington & Weldon Railroad Company is not involved in this controversy, or any aspect thereof; and the question is irrelevant, impertinent, and immaterial.) 'Ques. State the amount of the outstanding indebtedness of the Wilmington & Weldon Railroad and the market value of the bonds issued by said corporation.' (Same objection.) The purpose of the defendant in asking this question is to show the value of the property of the roadbed and other property of said corporation included in the assessment made by the defendant corporation commission.'

John D. Shaw, Chas. Price, W. F. Day, R. O. Burton, and Geo. Rountree, for complainants.

H. G. Conner, Simmons, Pou & Ward, J. C. L. Harris, C. A. Cook, and John W. Hinsdale, for defendants.

SIMONTON Circuit Judge.

The standing master has submitted to the court certain questions which have arisen in the course of his examination. The complainants, in their testimony in chief, produced evidence as to the taxes assessed on property in the county of New Hanover for the year 1898, having up for this purpose the register of deeds. In the course of this examination they sought to prove the true value of the property of certain corporations, probably for the purpose of comparison with the assessed value for taxation of these corporations. To this end they issued subpoenas duces tecum, and required the production of the books of such corporations, and their examination. Two questions arise: First, as to the competency and relevancy of an examination into the assessment for taxation of various parcels of property. Second, as to the right of complainants to demand the production of the books of these private corporations, and the examination of them. The discussion and decision of this last question has been postponed at the request of counsel on both sides.

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