SMITH v. RENTZ

SMITH v. RENTZ. N. Y. Court of Appeals, February, 1892. [Reversing 37 State Rep. 695 ; s. c., 14 N. Y. Supp. 255.] 1. Trials ; Inspection of document produced on not ice. ] The mere inspection by adverse party of a book or paper produced upon notice does not give the party producing it the right to put it in evidence. 2. Dictuml\ Where several questions are raised by the record on appeal, and are decided in course of the opinion, the fact that the decision of one of the later mentioned questions would alone have been sufficient to determine the appeal, does not render the decision of an earlier mentioned question obiter dictum. 3. Evidence ; Books of accountl\ The rule admitting in evidence the books of tradesmen and other persons engaged in business, in their own favor, is confined to transactions in the ordinary course of buying and selling or rendition of services, • and has no application to books or entries relating to cash ' items or dealings between the parties—e. g., the books of a person who acted as banker and general business agent of another. Appeal by defendant from the affirmance of a judgment by the General Term of the Supreme Court of the First Department entered upon the report of a referee, appointed at circuit, to hear and determine all the issues. The action was brought by Eugene Smith as executor -of Richard Patrick, deceased, against Frederika Rentz for -moneys advanced and paid out by plaintiff in behalf of •defendant as her banker and general business agent. The facts are fully stated in the opinion. The general term held (37 State Rep. 695 ; s c., 14 N. Y. Supp. 255), that the books of plaintiff’s testator were admissible in his behalf, because, on examination of plaintiff before trial, they had been produced on defendant’s notice, and inspected by his attorney; and that they were also admissible, notwithstanding the account related wholly to transactions in money, under the general .rule admitting the books of a party keeping no clerk. Leopold Leo, for appellant. I. The production upon notice of the ledgers upon examination before trial and their inspection by appellant without use,without compulsion by the court, without the imposition of any condition by the respondent, did not render the ledgers admissible in •evidence (Citing Abbott's Trial Brief, pp 89, 90; Sayer v. Kitchen, 1 Esp. 209; Lawrence v. Van Horne, 1 Caines, .276; Kenny v. Clarkson, 1 John. 394; Stalker v. Gaunt, 12 N. Y. Leg. Obs. 124 ; Calvert v. Flowers, 7 Carr & P. 387 ; see 4 Shepard Rep. 244; Rumsey v. Lovell, Anthons N. P. 26; Carrodine v. Hotchkiss, 120 N. Y. 608, 611 ; Withers v. Gillespy, 7 Serg. & Raw. 10, 14; Austin v. Thompson, 45 N. H. 113 ; Anderson v. Root, 8 Smedes & M. 362; Jordan v. Wilkins, 2 Wash. C. C. 482). II. Even if production upon notice and inspection upon .the trial made the object produced evidence for either •party, that result would not follow upon an examination before trial. To attain that result an order to give an Inspection to an adverse party is needed (Citing 1 Green-leaf on Ev. (14th ed.) 652 § 563 ; Houseman v. Sterling, 61 Barb. 347; De Berry v. Stanley, 5 Daly, 412; Edmonstone v. Hartshorne, 19 N. Y. 9; Code. Civ. Pro. §§ 803-809; McGuffin v. Dinsmore, 4 Abb. N. C. 241 ; Smith v. McDonald, 1 Id. 350). III. The admission of the ledgers cannot be sustained* under the rule making shop books evidence. The will does-not apply to entries of money lent or had and received or-paid, laid out and expended for the use of the opposite party (Citing Cowens Treatise and Practise, § 1530 et seq.; Case v. Potter, 8 John. 211 ; Vosburgh v. Thayer, 12 Id. 461 Dewey v. Hotchkiss, 30 N. Y. 497; Irvine v. Wartendyke,. 2 E. D. Smith, 374 ; Boyer v. Sweet, 4 Ill. 120 ; Veiths v.. Hagge, 8 Iowa, 163; Inslee v. Ex’rs of Prall, 23 N.J.L. 457; Conklin v. Stamler, 2 Hilt. 422; Tomlinson v. Borst,. 30 Barb. 42). H. B. Closson for respondent. I. By his notice ,o produce the books, defendant must be held to have virtually said that unless the originals were produced, he himself would offer secondary evidence of their contents; and having by the strength of this threat obtained inspection,, he cannot turn about and say that they never in fact were competent evidence, and that his threat to prove-them himself was not made in good faith (Citing 23 Abb. N. C. 148, note; First v. Second Ave. R. Co., 72 N. Y. 542;. Quin v. Lloyd, 41 Id. 349; Code Civ. Pro. §§ 809, 880; Tidd's Practise, p. 804 ; Wharton on Evidence, § 156 ; Calvert v. Flower, 7 C. & P. 386; Wilson v. Bowie, 1 Id. 8 ; Wharam v. Routledge, 5 Esp. 235 ; Long v. Drew, 114. Mass. 77; Clark v. Fletcher, 1 Allen, 53; Comm. v. Davidson, 1 Cush. 33; Blake v. Russ, 33 Me. 360; Penobscot Co. v. Lamson, 4 Shepley, 224; Hurlburt v. Hammond, 41 Mich. 343; Randel v. Chesapeake Co., 1 Harrington, 233; Edison El. Co. v. U. S. El. Co., 45 Fed. Rep. 55; Lawrence v. Van Horne, 1 Caines, 276; Williams v. Davis, 7 Civ. Pro. R. 282 ; 34 Hun, 626). The books were admissible in evidence on the same-grounds that the books of a tradesman, a lawyer or a. doctor are admissible (Citing McGoldrick v. Traphagen, 88 N. Y. 334; Burke v. Wolfe, 38 N. Y. Super Ct. 263: Young v. Jones, 8 Iowa, 219 ; Orcutt v. Hanson, 70 Id. 604). See note at the end of this case. [MAJORITY — ANDREWS, J.] ANDREWS, J. The action was brought to recover moneys advanced and paid out by the plaintiff’s testator for the defendant. The complaint alleges that from 1882 to 1887 the testator was the banker and general business-agent for the defendant, and that during said years the defendant, from time to time, deposited moneys with the testator, and the latter as requested by the defendant, from her funds in his hands, and, when these were insufficient from his own, paid her different sums in cash and also paid taxes and tradesmen’s bills for which she was liable, and that there was a balance due the testator on account of such payment of $3,744.75, which the plaintiff claimed to recover. The answer contained a general denial and interposed special defenses. On the trial before a referee the plaintiff offered in evidence the ledger kept by the testator containing the items of the alleged account. It was admitted against the objection of the defendant. Evidence was given on the part of the plaintiff independently of the ledger," tending to establish many of the items of the account, but a considerable number of the items for which a recovery was had are supported by the ledger alone. If the ledger was improperly admitted in evidence, the judgment must be reversed. It was admitted not only to establish the items, of which there was no other proof, but its admission may have influenced the referee in passing upon the items of the account of which it was not the sole evidence. The referee admitted the ledger on the ground that the defendant had under the Code examined the plaintiff before trial, and in that proceeding had given notice to the plaintiff to produce the books of the testator, and that upon such notice'the plaintiff produced certain books of the decedent, among which was the ledger containing his account with the defendant, which was inspected by the defendant’s counsel. The referee held that the ledger was thereby made •evidence for the plaintiff. The ledger was not used on the examination, nor were any questions asked founded upon the entries therein. ■ A similar question was before the second division of this court, in Carradine v. Hotchkiss (120 N. Y. 608). There the plaintiff, on the request .of the defendant’s •counsel made on the trial, produced a letter and delivered it to the latter, who read it, but did not offer it in evidence. Thereupon, on demand of the plaintiff’s counsel, the court directed the defendant’s counsel to put it in evidence, and in obedience to such direction, to which the defendant’s counsel excepted, the letter was read to the jury. When the case came to this court on appeal by the defendant, this ruling was challenged as erroneous. The •court s6 decided, Haight, J., saying: “ Whatever may have been the ancient rule in England upon the subject, we do not understand that the ruling of the court can be •sustained under any rule now existing in England or in this State.” But the court being of .opinion fhat the letter did not prejudice the defendant, affirmed the judgment. It is claimed that the decision upon the point of the admissibility of the letter was Unnecessary, and therefore is not binding. The question was properly raised and was decided. Its decision naturally preceded the •decision of the subsequent question, and the declaration •of the court was not obiter. We think, moreover, that the decision in the case accords with the view which has prevailed in the courts of this State and the practice of the profession. In Lawrence v. Van Horne (1 Caines, 276) the defendant gave notice to the plaintiff to produce on the trial a certain letter, which the plaintiff refused to do unless the defendant would engage to read it in evidence. The defendant claimed the right to inspect the letter before deciding whether he would' read it in evidence. The judge ruled that inspection could not be demanded except on the terms which the plaintiff imposed. On appeal one of the judges was of the opinion that the ruling was right and that the court could not compel a production of a paper for inspection-only. But the point was not decided. In Kenny v. Clarkson (1 John. 385) SPENCER, J., said : “ I must not. be understood as sanctioning the course adopted at the-trial in admitting the paper to be read without proof,, because notice had been given to produce it, and it had been called for and perused. The case of Lawrence v.. Van Horne (1 Caines 276) settles nothing, the then chief justice expressing no decided opinion on the question,, and the rest of the court were equally divided. It appears to me that the notice to produce a paper and calling for its inspection ought to be considered as analogous to a bill for discovery, where most certainly the answer is not evidence but for the adverse party. I think it is our duty to adopt such a course as" will not needlessly drive parties into-equity for discovery.” The doctrine announced by Judge SPENCER has, so ' far as our reports show, been acquiesced in by the courts- and the Bar of the State without question until a recent period. The English rule has not been uniform. Lord Kenyon, in Sayer v. Kitchen (1 Esp. 209), held that production of a paper on notice did not make it evidence. The rule seems to have been held otherwise by Lord DENMAN, in Calvert v. Flower (7 Car. & P. 386), and in two or three other nisi prius cases, but without any special examination. The courts of Pennsylvania and New Hampshire held the view that production and inspection alone do not make the paper evidence (Withers v. Gillespy, 7 Ser. & Raw. 10; Austin v. Thomson, 45 N. H., 113). GIBSON J., in Withers v. Gillespy, referring to the practice on bills of discovery, says: “ The reasons drawn from analogy render the argument almost insuperable.” The New Hampshire case was decided upon an elaborate examination of the English and American authorities and •contains the most thorough opinion on the question to be found in the books. The courts of Massachusetts, Maine and Delaware .seem to have followed the supposed English rule on the subject. It was said in the earliest case in Massachusetts •on the subject (Com. v. Davidson, I Cush. 33), that it was .a mooted point whether calling for the books of the •opposite party and inspecting them, and doing nothing more, makes the books evidence; but in Clark v. Fletcher (1 Allen, 53) the point was decided. In Maine (Blake v. Russ, 33 Me. 360) the question was decided without assigning any reasons, and the ruling in the Delaware case (Randel v. Chesapeake, etc., Co., 1 Har. 233,284) was made on the trial, and, so far as appears, without any examination. The authorities on the question are divided ; but we perceive no reason for departing from the rule as understood in this State. The claim that it gives the party calling for a paper an unfair advantage, if he may inspect it and then decline to put it in evidence, seems to ius rather specious than sound. The same objection would lie in case of bills for discovery, but it was the settled rule that an answer, though under oath, was evidence ■only for the party who obtained it. The party who has in his possession books or papers which may be material to the case of his opponent, has no moral right to conceal them from his adversary. If on inspection the party •calling for them finds nothing.to his advantage, his omission to put them in evidence does not prevent the party producing them from proving and introducing them in evidence, if they are competent against the other party. The party calling for books and papers would be subjected to great hazard if an inspection merely, without more, would make them evidence in the case. That rule tends rather to the suppression than the ascertainment of truth, and the opposite rule is, as it seems to us, better calculated to promote the ends of justice. The production of books and papers on notice is the voluntary act of the party. If he refuses, it may, as is claimed, authorize the other party to give secondary evidence of their contents, which the party having possession cannot then answer by producing them. But if they •contain facts favorable to the other side, they ought to be disclosed, and if production is refused, the party refusing may justly incur the danger of having secondary proof •given of their contents. The claim is also made that the books were competent ,as original evidence of the entries under the rule making books of account in certain cases evidence in favor of the party keeping them. We think there is no foundation for this contention. The rule which prevails in this State (adopted, it is said, from the law of Holland), that the books of a tradesman or other person engaged in business, containing items of accounts, kept in the ordinary course of book accounts, are admissiblfe in favor of the person keeping them against the party against whom the charges are made after certain preliminary facts are shown, has no application to the case of books or entries relating to cash items or dealings between the parties. This qualification of the rule was recognized in the •earliest decisions in this State, and has been maintained by the courts with general uniformity (Vosburg v. Thayer, 12 John. 461). It stands upon clear reason. The rule admitting account books of a party in his own favor in any case was a departure from the ordinary rules of evidence. It was founded upon a supposed necessity, and was intended for cases of small traders who kept no clerks, and was confined to transactions in the ordinary course-of buying and selling, or the rendition of services. In these cases sdme protection against fraudulent entries is afforded in the publicity which, to a greater or less extent, attends the manual transfer of tangible articles of property or the rendition of services, and the knowledge which third persons may have of the transactions to-which the entries relate. , But the same necessity does not exist in respect to-. cash transactions. They- are usually evidenced by notes, or writing, or vouchers in the hands of the party paying- or advancing the money. Moreover, entries of cash transactions could be fabricated with much greater safety and with less chance of the fraud being discovered than entries of goods sold and. delivered, or of services rendered. It would be unwise to extend the operation of the rule admitting a party’s books in evidence beyond its present limits, as would be the case, we think, if books containing cash dealings were held to be competent. Parties are now competent witnesses in their own-behalf. A resort to books of account is thereby rendered unnecessary in the majority of cases. We think the ledger was erroneously admitted in-evidence, and the judgment below should, therefore, be reversed and a new trial ordered. All concur except Maynard, J., taking no part. Note on Inspection of Documents in Possession of Adverse. Party. The following notes of cases will show the extent of the rule-established in the case in the text: Huckins v. Insurance Co., 31 N. H. 238. Assumpsit. Defendants notified plaintiff to produce his ledger; the plaintiff produced the ledger and offered it to the defendants upon the condition that, if examined by them, it should be read in evidence ; and the court ruled that if defendants examined the ledger, the plaintiff: might read it in evidence, to which defendants excepted. Held, no error. The plaintiff was not obliged to produce his ledger and could attach to its production the condition which he did ; and if the defendants saw fit to decline to examine the book on such condition, they might have given secondary evidence of its contents. Stiles v. Allen, 5 Allen, 320. Trespass. The simple verification of a signature by a witness does not entitle the adverse party to see the document or to cross-examine the witness upon it, until it is offered in evidence. It is irregular, however, to ask any question concerning a document which is produced and shown a witness unless it is intended to offer it in evidence. ■ Smith v. McDonald, 1 Abb. N. C. 350. Action for damages for an •alleged breach of duty as factor. Plaintiff obtained an order for the examination of defendant before trial and with the order served a subpoena duces tecum for the production of his books. Defendant refused to produce his books.—Held, that he might be required to produce the books by subpoena. The court say: “The books and papers of which an inspection or copy is procured, under § 388, do not, therefore, become evidence in the cause. The party producing them may not, by virtue of their production, use them as evidence in his own favor; and he at whose instance they are produced must upon the trial, if he would put them in evidence, resort to the same process and be subject to the same rule with respect to their production and admissibility, as if no such discovery had been made. But if called for and produced under a subpoena duces tecum, they may be resorted to'in the examination of any person as a witness whether a party or not, and whether he be examined at the trial or previously, and it would be unreasonable and unjust to withhold that process merely because a discovery is also allowed under certain Special circumstances. “But a subpoena duces tecum may not be used as a means of obtaining a discovery, and the party calling for the production of books and papers on the preliminary examination of a party or other witnesses before trial will be required to pursue the examination with respect to their contents in the same manner and subject to the same rúles as if the trial was actually proceeding in court.” Carradine v. Hotchkiss, 120 N. Y. 608; s. c., 31 State Rep. 951. It seems that the court is not authorized to compel a party to put a letter in evidence because he has called for its production by the adverse party and inspected it. McCall v. Moschcowitz, 10 Civ. Pro. R. 107, 129. Action to dissolve partnership. Counsel for a party has not the right to compel the inspection of the private writings of a witness not a party to the action, without the declared intention of offering them in good faith in evidence. Jordan v. Wilkins, 2 Wash. C. C. 482. Note.—The defendant produced certain papers which plaintiff had given notice would be réquired at the trial, but prayed the opinion of the court if he was obliged to show them to the plaintiff until he declared his intention to read them in evidence. By the court: The plaintiff has no right to see the contents of these papers but on this condition. People v. Dyckman, 24 How. Pr. 222. Contempt proceedings. A witness producing his book of account under a subpoena duces tecum may be compelled to read out of the book and testify as to its contents. McGuffin v. Dinsmore, 4 Abb. N. C. 241, 245. On examination of a party before trial, the production of books and papers either under order or subpoena does not entitle the adverse party to a discovery' of their contents, nor can he inspect or examine them or conduct the examination of the party whosé deposition is to be taken with respect to them otherwise than on a similar examination of a party or witness at the trial. If discovery or inspection be desired it may be compelled in proper case by a proceeding specially directed to that end. Morley v. Green, 11 Paige, 240. Suit in chancery. Appeal from an order directing the appellant, not a party to .the suit, to surrender to the receiver of a partnership the books of the firm in his possession which were claimed by him to be held as security. Held, the j court had no jurisdiction over the appellant to compel such a delivery. He was a mere witness before the master ; and, if these books were wanted as evidence, a subpoena duces tecum should have been served. But, even in that case, the court would have no right to take the books out of the possession of the witness or to allow them to be used for any purpose except as evidence. Aiken v. Martin, 11 Paige, 499. Suit in chancery. The court ■say: “ Where a deed or instrument is in the hands of a/third person who produces it without objection, under a subpoena duces .tecum, the party against whom it is produced has no right to insist that the person thus producing it shall be sworn as a witness ; so as to give such party the benefit of a cross-examination, although ■such witness is interested in his favor. And some of the common law courts of England have recently gone so far as to compel the person having custody of the deed or instrument to produce it without being sworn at all (Perry v. Gibson, 1 Ad. & Ellis, 48 ; Summers v. Moseley, 2 Cromp. & Mees. 447 ; Evans v. Moseley, 2 Dow. Pr. Ca. 364). I think, however, in this court it is the privilege of the person who is thus subpoenaed to produce a paper to be ■sworn in relation to the production of the paper, to enable him to state upon oath the reasons why he should not be compelled to produce it.” Aiken v. Martin, 11 Paige, 499. Suit in chancery. Motion to •compel a person to appear before an examiner and produce a certain document. The court say: “ Where a deed or instrument which a party wishes to prove as an exhibit is in the hands of a third person, who is unwilling to produce the same, the proper course is to compel him to produce it, under a subpoena duces tecum ; and to have the ■witnesses in attendance to prove the exhibit or to be examined in relation thereto when it is thus produced. For until the deed or instrument is duly proved or is referred to in the examination of •some of the witnesses in the cause as an exhibit, neither the parties nor the examiner has a right to deprive the person producing such •deed or instrument of the custody or possession thereof.” Boynton v. Boynton, 25 How. Pr. 490; s. c., less fully, 16 Abb. Pr. 87. Wheré a witness testified as to his knowledge of a certain contract between the parties and was then asked if he had the contract with him, to which he answered in the affirmative; but on request of counsel refused to produce it/—Held, the court had power .and it was its duty to compel the witness to produce the contract or punish him for contempt. Lawrence v. Van Horne, 1 Caines, 276. The theory of regarding the practice of giving notice to produce papers as a means to save expense of going into chancery for a discovery, seems to have been first suggested in this state by the nonconcurring opinion of Thompson J., in this case. As the result of such view he states : “ I think the judge ought to have said to the plaintiffs : ‘ If you have a letter, and,intend to produce it, the defendants have a right to inspect it and thus make their election whether to read it in evidence or not. If you refuse to produce it, the defendants will have a right to go into proof of its contents.”' Edmonstone v. Hartshorn, 19 N. Y. 9. Action for salary. Plaintiff on examination of a witness de bene esse proved several letters and documents which were marked for identification. Upon the trial plaintiff read the deposition and some of the exhibits-Defendant called for the production of the other exhibits referred, to. Plaintiff refused, and the referee decided that he was not. bound to produce them.—Held, no error. Merely proving papers-do not make them evidence in the case, and until they are read im evidence the adverse party acquires no right over them. The court say: “ If he [defendant] desired and was entitled to the benefit of them in evidence, he should have procured a discovery of them or been prepared to give parol evidence of their: contents on their not being produced.” Perry v. Gibson, i Ad. & El. 48. The adverse party has no right to require that the person producing books under a. subpoena duces tecum, which are put in evidence, shall be sworn so-that he may have an opportunity of cross-examining him. S. P. Summers v. Moseley, 2 Cromp, & M. 477, 489. The court' say: Whether he [the witness] could require to be sworn not aP testificandum, but to make true answer to such questions as the court should demand of him touching the possession or custody of the document, is not now in question. Perhaps he might; but we are clearly of the opinion that he has no right to require that a party bringing him into court for the mere purpose of producing a. document should have him sworn in such a way as to make him a. witness in the cause.” See also Sherman v. Barrett, 1 McMull, (N. Car.) 147, 163;. Martin v. Williams, 18 Ala. 190. Woodstock Iron Co. v. Reed, 84 Ala. 493; s, c., 4 So. Rep. 369. Action on a contract. A subpoena duces tecum was served on the secretary of defendant corporation to produce a book of the company. At the trial plaintiff's counsel called for the book and in response thereto defendant’s counsel produced the book,—Held, the book having been produced in open court, it was admissible in evidence without further proof of identification. Richmond’s Appeal, 59 Conn. 226; s. c., 2 Atl. Rep. 82. Probate of a will. The will was contested because of undue influence of one C, a residuary legatee. At the trial the counsel for the contestants-asked the court to compel C, who had acted as agent of testator, to allow an examination of his books containing accounts of his stewardship. The court refused.—Held, no error. The exercise of such extraordinary power should be left to the discretion of the trial to be granted or withheld as the circumstances warrant, especially as under the existing statute discovery is provided for and power is given to compel the attendance of witnesses and adverse parties for examination, and to call them as witnesses when present. Hall v. Young, 37 N. H. 134. The court will not, upon motion of a party, order a person summoned under a subpoena duces tecum to produce the paper mentioned in the subpoena, until it appears from his own admission or from other evidence that he has them under his control. Code Civ. Pro. § 809. “ A book, document, or other paper produced under an order made as prescribed in this article has the same effect when used by the party requiring it as if it was produced upon notice, according to the practice of the court. 2 R. S. 200, § 27 (2 Edm. 208). See Smith v. McDonald, 1 Abb. N. C. 350 ; 3 R. S. 5th ed. 294.