FENLON v. DEMPSEY

FENLON v. DEMPSEY. N. Y. Supreme Court, First District, Chambers; April, 1888. 1. Reference; affidavits used on motion.] Upon a reference to a referee to take proof of the facts constituting an alleged contempt and to report the same with his opinion thereon, the affidavits used upon the motion are not properly before the referee. Only such proof as is offered by the parties at the bearing is properly before him. 2. Same; conclusiveness of report.] The report of the referee in such a case is not conclusive; and upon its coming in, the affidavits used upon the motion on which the reference was ordered will be considered in passing upon the report. 3. Examination before trial; discovery and inspection.] A mere statement by the officers of a corporation that they are not now possessed of the books which they were ordered to produce upon an examination before trial, will not exonerate them from obedience to the order, where it appears that the books were lately in their control. 4. Same; contempt.] A motion to punish the officers of the corporation for their failure to comply with the order will be granted. Motions to set aside referee’s report, and to punish for ■contempt. The plaintiff, John Fenlon, as receiver in supplementary proceedings of the property of John Dempsey, commenced this action against John Dempsey, Jane Dempsey and the Union Square Printing Company to recover property held by the defendants and alleged to belong to the judgment ■debtor. The plaintiff in order to frame his complaint and to effectually proceed with an action for the recovery of the property so withheld, moved for an order for the examination and depositions of the defendant company and John Dempsey, as president, with directions to produce books of the corporation, which was granted by Barrett, J,, on November 10, 1887, by an order which required the defendants to. appear on November 18. John Dempsey and George 0. Carroll, the treasurer of The Union Square Printing Go.', were served with this order,, and also with a supoena duces tecum> but neither of them appeared on that date. They were represented, however, by counsel, whose request for an adjournment being denied,, their default was noted. Subsequently they appeared; but did not produce the books. The statement of Carroll, as to inability to produce books, etc., was stated by him as follows, in his affidavit in opposition : I further say that I informed the said attorney upon said examination that I did not have the books of said Union Square Printing Company in my possession or under my control, and that I was not in a position to furnish him with the same or any information in regard thereto. . . .' I further say that I have been and am at all times willing •and ready to answer any and all questions having reference to my business relations to Mr. Dempsey, or his relations with the Union Square Printing Company ascertained from him, as far as I may know the facts in regard to the same; but I am unable to furnish him with the said books which are set forth by him in said affidavit as it •appears from the examination as made by him. The same are not in my possession, nor am I authorized to furnish them to the said McCrone by reason thereof. Dempsey, in his affidavit, said nothing about the produc- • tion of the books. Proceedings to punish for contempt were then taken by order to show cause on affidavits and the record of examination. On the hearing, before Mr. Justice Lawrence affidavits were read in opposition. Mr. Justice Lawrence referred to a referee to take proof us to the facts constituting the alleged contempt, and report the same with his opinion. The referee in his report gave it as his opinion that the defendants had been guilty of two clear contempts of the orders of this court, having twice failed to comply with the" directions of the court to produce the books. Defendants now moved to set aside the referee’s report, upon the merits, and on the ground that the referee failed to consider and determine the controversy-in issue as existing between said plaintiff and defendant. Plaintiff moved to confirm the referee’s report and for the punishment of defendants for contempt. John McCrone, for plaintiff. Louis P. Levy (Abram Kling, of counsel) for the ■ defendants. The order of November 10 (omitting formal parts), was as follows : On reading the annexed affidavit of John T. Fenlon, the plaintiff herein, verified November 9, 1887, and on motion, of John McCrone,. of counsel for plaintiff : 1 Ordered, that the abovó named Union Square Printing Company, a corporation, be examined and its deposition be taken herein, pursuant to sections 872 and 873 of Code of Civil Procedure, and for that purpose-that John Dempsey, as president, and George D. Carroll, as treasurer of said defendant corporation, be examined, and their deposition be taken pursuant to said sections, and that for that purpose, that they appear before me or a justice of this court at the chambers thereof at the county court house in the city of New York on the 18th day of November, 1888, at 10 1-2 o’clock in the forenoon, and submit to examination concerning the matter stated in said affidavit, and for the purpose-of said examination the said John Dempsey, as president, and said George-D. Carroll, as treasurer of said corporation, are directed to produce at the-time and place aforesaid the book or books of said defendant corporation, the Union Square Printing Co., showing the ownership and transfer of stock therein, audits business ledger or blotter, as well as its by-laws, and books showing transactions with defendants, John Dempsey and Jane R. Dempsey, or either of them, and particularly books or papers, showing the issue of stock to defendants John Dempsey and Jane R. Dempsey, or transactions with her, and books or papers showing payments by defendant, John Dempsey, to it, or services by him, to it, the-said defendant company, for the purpose of examination and inspection as prayed. Let a copy of this order and of said affidavit be served on said John Dempsey, as president, and GeorgeD. Carroll, as treasurer, and upon the-attorney of said defendants within the State, on or before the 12th day of November, 1887, and service upon said Dempsey or said Carroll shall: be service upon said company. The substance of the order of reference granted by Justice Lawrence, January 20, 1888, was as follows: The motion of the plaintiff on the order to show cause granted herein on November 23, 1887, to have punished John Dempsey, as president, and George D. Carroll, as treasurer of defendant company, witnesses, and to have fined said company as in said order to show cause is prayed, having been heard, on reading and filing said order to show cause with the affidavits annexed thereto, of John McOrone, etc., and mentioning the other papers on which the motion was made, including the record of two previous examinations, and also affidavits-read in opposition; and' reciting the appearances: Ordered, that it be referred to Grosvenor P. Hubbard, Esq., counsellor at law, as referee, who is hereby appointed referee to take proof as to the facts constituting the alleged contempt herein, and to report the same with his opinion thereon, with all convenient speed. [Remaining clauses referred to times of hearing, etc.] [MAJORITY — Patterson J.] Patterson J. There are two motions before the court in this cause, one made by the defendant, and by George D. Carroll, to vacate and set aside the report of a referee on the ground that he failed to consider and decide the matters referred to in the order of January 18, 1888, by which he was appointed referee. The order was made in a proceeding instituted to punish the persons named for a contempt of court in-disobeying certain orders requiring the production of books of a corporation with which they were officially connected. The specific alleged reason for asking that the report be set aside, is that the referee has not determined the facts, the reference to him having been to take proof of the facts constituting the alleged contempt, and to report the same, with his opinion thereon. It is stated in an affidavit of Louis P. Levy, the defendant’s attorney, that on January 3, the referee stated he would not read nor examine the depositions used on the motion upon which the order of reference was made, nor consider them for any purpose, and that the only papers he would consider were the affidavits introduced in evidence before him in connection with the orders, which affidavits he would consider as pleadings, and the affiant states he verily believes the referee did not consider any other papers. On looking into the whole case, I find that the referee has properly passed upon all the matters presented to him. He was not called upon to do anything except to find facts for the information of the court, and it was his duty to require proof of any allegation made. ' This he did so far as proof was offered by either party.' The affidavits arc all before the court, and have been carefully considered by me in connection with the referee’s findings and report. Those findings and the report are not binding on the court, and I have not considered them as being so, but I have myself examined the case in all its bearings and details. There is no reason, substantial or technical, why the referee’s report should be vacated or the proceeding longer delayed. The second and main motion is to punish- the parties named for the contempt with which they are charged, and it is obvious on the papers that they have wilfully and flagrantly violated the orders of the court. They were required to produce books which were at one time (as late as last September) in their control. They do not deign to give any explanation or show in any way that they are unable to produce them nor even to account for the disappearance of the books or in any way to excuse themselves. All that appears from their affidavits or depositions, is that they have not now possession of the books, but they did lately have .that possession. The order of reference was made by Judge.Lawebnob, primarily, for their benefit, and they could have discharged themselves from contempt by appearing to testify before the referee, but they did not choose to do so. The simple statement of the case is, that they were required by an order of this court to produce the books. The order requiring them so to do is still in force. They have had ample opportunity of showing their inability to comply with the order; they have not shown it, nor offered to show it in any way by any direct proof whatever, nor by any competent legal proof, and they are in contempt for not obeying the order. ' As officers of the corporation they had control of the books—and it requires something more than a mere statement that they are not now possessed of them to enable them to escape from the duty of obeying an order which commands them to produce them. They will be committed to the common jail until the books are produced, and will be fined the costs and expenses of this motion. Ordered accordingly.