State Ex Rel. Pitcher v. District Court , 114 Mont. 128 ( 1943 )

It would not seem to require more than a casual reading of the provisions of Chapter 172, Code of Civil Procedure to disclose that their spirit and purpose are to perpetuate for future use evidence or testimony of known facts. For instance, Subdivision 2 of section 10687, within that chapter, requires that the petition for perpetuation disclose "that the proof of some fact is necessary," and subdivision 3 requires that the petition give a general outline of the facts expected to be proved. In other words, nothing can be found which indicates a possibility that an order for perpetuation can be utilized as a bill of discovery. In passing, it might be well to notice that both by the express provision last mentioned and by the provisions of Section 10691, both of which sections are portions of the original enactment on the subject of perpetuation proceedings, it is made apparent that there must be a showing of necessity for perpetuation, at least within the purview of the last cited section. That section provides that no use may be made of a deposition taken under the provisions of the instant chapter unless it appear that the witness is dead or insane, or that he cannot be found or is unable by reason of age or other infirmity to testify. We think that it is apparent from the provisions of subdivision 2 of section 10687 that there must be a showing of inability to procure other evidence of the known fact, as well as a showing that the witness whose evidence is sought to be perpetuated can and will make a record of the known fact for use under the conditions stated. We also contend that there must be a showing of likelihood that the conditions mentioned in section 10691 are about to come to pass before an order of perpetuation can properly be made under the chapter under discussion.

An examination of the petition for perpetuation discloses that the petitioner for perpetuation, the contemplative plaintiff, Charles F. Herman, is unaware of what, if any, cause of action he may have against relator, since he alleges in paragraph 3 of his petition that "said proof is necessary to place your petitioner in a position to intelligently prepare his complaint." As to his allegation of his expectations concerning the proof which will be forthcoming, he merely states that he is informed and believes that certain generalities will be testified to by relator. Obviously, since the petition for perpetuation alleges that petitioner Herman himself performed services and must have received whatever compensation was paid, he must be in a position to furnish testimony, if any exists, as to the situation which now exists or which has existed concerning his account with relator, if any. It would therefore appear that there is no necessity for the perpetuation. Further, no showing is made by the petition as to what ultimate facts are expected to be proved. In this connection, we note that we can find nothing in the provisions contained within Chapter 172 contemplating the taking of testimony of an adverse party where a situation exists such as that the evidence should be within the power of the petitioner for perpetuation to produce, without perpetuating the testimony of the proposed witness. Especially, we do not find any warrant in the statutes contained within the instant chapter for forcing an adverse party to submit himself for examination in the hope that he may make admissions against his own interest. The petitioner for perpetuation alleges that he cannot establish the amount due him without hearing what relator may say on the subject. We cannot imagine a clearer instance of a "fishing expedition" than such an instance as this.

In seeking to require relator to produce his books and papers for examination, the petitioner for perpetuation alleges a bald conclusion that such examination is necessary, without any statement as to why such is necessary. This court has held as late as October, 1941, that production of such documents cannot be required in a proceeding for perpetuation of testimony without a showing of their necessity and the reasonableness of such action. (State ex rel. Smith v. District Court, 112 Mont. 506,509, 118 P.2d 141; State, ex rel. Mendenhall, 29 Montana 363, 369, 74 P. 1078.) In the same case, this court stated that a failure to make a showing of the necessity contravened the prohibition of section 7, Article III, of the Montana Constitution. The protection given by section 7, Article III, "reaches all alike, whether accused of crime or not. (Stateex rel. King v. District Court, 70 Mont. 191, 196,224 P. 862.) Search and seizure statutes are not intended to permit "fishing expeditions" (State ex rel. Thibodeau v. DistrictCourt, 70 Mont. 202, 209, 224 P. 866.)

In connection with the order of respondent District Court purporting to require production of relator's books and papers, we point out that said order purports to require relator to produce for examination all books of account and other records by him kept in the usual course of business or otherwise touching upon or relating to the account of relator with said Herman,including, but not limited to, certain broadly designated papers. We call to the Court's attention to the statement of the rule contained in 31 L.R.A. (n.s.) 835 "The rule is well established, * * * that subpoenas intended merely as a means of eliciting information or fishing, and not for the purpose of obtaining documents particularly described, are not allowable." (See also Kullman, Salz Co. v. Superior Court, 114 P. 589, 593).

Relator further contends that the order for perpetuation is in violation of section 27, Article III, of the Montana Constitution, relating to due process of law. No notice of the application for the order for perpetuation was given relator until after the order had been made. (See Nations v. Johnson, 24 How. 195, 16 U.S. (L.ed.) 628, 631;) Mason v. Eldred, 6 Wall. 437, 18 U.S. (L.ed.) 783, 785.)

If it be true, as was said in the case of State ex rel.Boston and Montana Co. v. District Court, 27 Mont. 441, 445,71 P. 602, that "the application [of this nature] should apprise the court of the nature of the action and the relief sought so as to determine whether or not the documents sought to be inspected were material and relevant to the issues," since in such a situation as we are considering here there is no action pending from which the issues can be determined, such a rule, or the purpose thereof, should have even stronger application here, and the petition for perpetuation should have disclosed the exact issues and the exact evidence sought to be perpetuated, so that the court could fix the exact limits of the examination. The petition is sufficient, and the order and subpoena ducestecum are regular. An examination of the application for the order in the lower court will disclose that a more substantial foundation was laid than was done in State ex rel. Holcomb v.District Court, 54 Mont. 574, 172 P. 329, in the application there involved. This court in State ex rel. Smith v. DistrictCourt, 112 Mont. 506, 118 P.2d 141, said of the application in the Holcomb Case, supra, that "a study of the application does show that it contained more than the statute in question required for the perpetuation of testimony, in that a full showing as to the books and papers there ordered produced was made; the accounts and records were described, their relevancy was alleged, as was the fact that to establish the applicant's case their examination was necessary." By necessary implication the court thus held that a petition such as was involved in the said Holcomb case was sufficient to avoid offense against the constitutional guaranty against unreasonable searches and seizures, and that had the point been raised in that case it would not have changed the result reached.

It is true there is no action pending. There did not need to be to authorize the lower court to entertain the petition and make the order. The only jurisdictional requisite is that it appear from the application that an action in a court of this state is contemplated. (See State ex. rel. Cook v. DistrictCourt, 102 Mont. 424, 428, 58 P.2d 273, and State ex. rel.Holcomb v. District Court, supra.) This entire subject is treated in the books under the general title of "Discovery." (27 C.J.S. 3 et seq.) Section 20 of this work says: "Generally, discovery under statutes is the disclosure by the adverse party of facts or documents which are necessary to the party seeking the discovery as a part of his cause of action or as evidence of his rights or title."

Discovery under the statutes may ordinarily be had in actions in law or in equity, growing out of tort or contract. (27 C.J.S. 37, sec. 23.) Dependent on statutory provisions an examination may or may not be granted before an action is commenced. (Id. 27, sec. 24.) See, also, Sinclair Refining Co. v. JenkinsPetroleum Process Co., 289 U.S. 689, 53 S. Ct. 736,77 L. Ed. 1449, 88 A.L.R. 496.) Moreover an examination of this character may be had to enable a party to frame his pleadings, where necessary, or to frame a bill of particulars. (27 C.J.S. 49, sec. 31.)

Relator makes the contention that no showing was made that the evidence sought could not have been obtained elsewhere or produced otherwise by the applicant. In response attention is called to the case of State ex. rel. B. M. Co. v. DistrictCourt, 30 Mont. 206, 216, 76 P. 206, where it was held that it was not a prerequisite that it be shown that the evidence could not have been obtained from other sources.

The constitutional questions involved: Relator invokes the protection of section 7, Article III of the state Constitution and says that the applicant is desirous of going upon a "fishing expedition"; that no foundation is made for the necessity of the examination. In this connection he cites the case of State ex.rel. Smith v. District Court, 112 Mont. 506,118 P.2d 141. We too rely in part upon this case for our position in these respects. There the court said: "Here no showing is made by the application as to what papers relators should be required to produce, what relevancy they might have to the contemplated action, what necessity for their production existed, nor any other thing even to indicate that the applicant desired the subpoena to issue." The court was right in its decision in that case. But where we have the application in the case at bar containing everything that the Smith Case lacked, we must then rely upon the authority of the Smith Case for our position that the petition is sufficient. A very excellent case upon the complaint of the relator in this behalf in another species of discovery which is very illuminating, is Union Trust Co. v.Superior Court 11 Cal. 2d 449, 81 P.2d 150, 118 A.L.R. 259. There is no merit in the contention that the petition, order and subpoena duces tecum violated the search and seizure provision of the state constitution.

The final contention of the relator is that the order for perpetuation violated section 27, Article III of our Constitution, the reason assigned being that no notice of the application for the order was given to the relator until after it was made. The district court ordered the applicant to give the relator at least five days' notice of the date set for hearing by serving him with copies of the petition and order. No authority is cited to sustain the position of relator which by any approach could be said to be applicable here. The rule governing the contention of the relator is found in 16 C.J.S. 1231 section 612: "Taking of testimony by one party without notice to the other on a preliminary investigation does not constitute a violation of the guaranty of due process, but after the filing of suit due process requires notice before the taking of testimony to be used in the case." (See, also, State v. Jack, 76 P. 911,69 Kan. 387, 1 L.R.A. (n.s.) 167, 2 Ann. Cas. 171, affirmed 26 S. Ct. 73,199 U.S. 372, 50 L. Ed. 234, 4 Ann. Cas. 689.) Certiorari to review the action of the district judge of Madison county in ordering the examination of the relator as a witness preparatory to an action which the petitioner expects to bring against the relator.

The proceeding for the examination was instituted under Chapter 172, Code of Civil Procedure, Sections 10686-10692, Revised Codes, which authorizes and provides procedure for perpetuating the testimony of a witness which is material as proof of facts to be established in anticipated litigation. The testimony is taken in the manner and form of a deposition upon order of the district judge. The order is made upon verified petition showing that the applicant expects to be a party to an action to be commenced and giving the names of the persons he expects to be the adverse parties and showing the name of the witness to be examined and a general outline of the facts[1] expected to be proved. While the statute does not expressly so provide, the petition should show the nature of the expected action and the subject matter of the controversy involved. No one can be subjected to examination under oath without knowing the purpose thereof and the particular matter to which his testimony is to be applied. In an action commenced the pleadings provide the information. When no action has been commenced the petition for the examination must sufficiently show the subject of controversy so the witness may know the matter concerning which he is being examined.

From the petition so presented the district judge must[2] determine whether the proposed examination falls within the purview of the statute.

The petition in the instant case is designated "Petition to Perpetuate Testimony" and is as follows:

"The application of Charles F. Herman respectfully shows:

"I. That he expects to be a party plaintiff in an action to be brought in the above styled district court.

"II. That Walter Pitcher will be, or your petitioner expects him to be the sole adverse party.

"III. That the proof of the account for work, labor and services rendered by your petitioner to Walter Pitcher, doing business as the Twin Bridges garage, or otherwise, at Twin Bridges, Madison County, State of Montana, during a period of approximately twenty-four years terminating on or about the month of March, 1941, as well as the offsets and payments thereon, are material to a full and complete adjustment of said account; and upon which said account your petitioner alleges there is upwards of One Thousand and no/00ths ($1000.00) Dollars now due, owing and unpaid from the said Walter Pitcher to your petitioner. Said proof is necessary to place your petitioner in a position to intelligently prepare his complaint in an action upon the account to force the payment thereof by the said Pitcher to your petitioner.

"IV. That Walter Pitcher resides at Twin Bridges, Montana, Madison County and is a necessary and material witness for your petitioner upon the trial of an expected action upon said account whose testimony is and will be necessary and material to your petitioner in the prosecution of said expected action thereon; that your applicant is informed and believes that the said Walter Pitcher will testify to the following facts and he expects to prove them by his testimony, to-wit:

"That your petitioner commenced work and labor in the employment of the said Walter Pitcher on or about the year 1917 and that he continued in his said employment up to on or about the month of March, 1941; that he will establish the compensation agreed upon by and between your petitioner and said Pitcher. That he will testify to and establish the books of account which he has kept in the operation of his business at Twin Bridges, Montana, and adequately identify and establish them for the use of your petitioner upon the trial of the said cause of action. That he will produce and identify his several books of account, including cancelled checks given in partial payment of said account at diverse times during said period as well as his social security and unemployment compensation records. That he will testify to any and all offsets and claims credit against your petitioner's wages and compensation during the said period of time.

"V. That without the testimony and records of the said Walter Pitcher your petitioner will be unable to establish for the court the correct amount due, owing and unpaid from the said Pitcher to your petitioner.

"VI. That the said Walter Pitcher has in his possession Social Security and Unemployment records as well as books of account, including cancelled checks, showing the true status of the account of your petitioner and it is necessary that said Pitcher produce all of such records and to testify concerning them, and he will on such hearing as your petition[er] is advised and believes, identify them so that his testimony will be adequately illustrated and explained so that the same may be useful to the plaintiff on the trial of the anticipated action.

"Wherefore your petitioner prays that this honorable court make an order allowing the examination of the said witness and directing him to produce all of his records of whatsoever kind, nature or description that relate to his employment by the said Walter Pitcher during the period mentioned in this petition including but not limited to the following: Social Security Records, Unemployment Records, all cancelled checks, all receipts, ledger accounts, if any, all accounts or records that relate to the amount of compensation and the offsets, if any, claimed by the said Pitcher against the Employment contract or wages of the petitioner during the period described in the petition."

Upon this petition the judge made an order for the deposition of the relator to be taken before the clerk of the court and he was required by the order to "then and there have with him to illustrate and explain his testimony all books of account or other records by him kept in the usual course of his business or otherwise touching upon or relating to the account of said Walter Pitcher with said Charles F. Herman, including but not limited to the following:" (listing the same books and papers as set out in the petition).

A subpoena was issued by the clerk of court commanding the relator to appear for examination as ordered by the court and with the following further command: "And you are further commanded to bring with you and then and there produce in evidence, to illustrate and explain your testimony, all books of account or other records by you kept in the usual course of your business or otherwise touching upon or relating to the account of you, the said Walter Pitcher, with said Charles F. Herman including but not limited to the following:" (listing the same books and papers as set out in the petition).

The petition shows clearly that the purpose of the proposed examination is not such as provided for by the statute under which the proceeding was instituted. The applicant does not want to examine a witness to preserve his testimony. He wants to examine books and records to determine the true status of an account on which he expects to sue. This is not a conclusion from reading the petition. It is the statement of the applicant himself. He says that there is upwards of $1,000 owing to him on the account but that he needs to examine the witness who is the party he expects to sue, and his books of account and records, to get the facts necessary to a full and complete adjustment of the account and to enable him to prepare his complaint in an action to enforce payment. He asks that the witness bring all his books of account and records of all kinds kept by him in the business in which he was engaged and wherein the applicant was employed and out of which the account arose. He says that the witness will identify all such books and all the entries therein and all the records and papers in his possession bearing upon and constituting the record of the account so that the same will be in readiness for convenient use upon the trial of the case.

This is an entirely different proceeding from that for the[1, 2] perpetuation of testimony. What the applicant seeks to accomplish is to have an audit of the books and records and that it be done by an inspection and examination of the books before the clerk of the court with the adverse party there under oath, identifying the books and records and pointing out each and every item of entry and each and every paper relating to the account, all to be written into the deposition. After that has been done he proposes then to bring action on the account upon the basis of the statement of the account so established.

The plan proposed, even though it were attempted in a proceeding authorized by law, seems altogether impractical, and the purpose in view impossible of accomplishment thereby. It is not to be expected that the witness will have in his mind all the facts sought to be established. The facts will have to be ascertained by examination of the books and records. It is inconceivable that this can be done as proposed, before the clerk of the court and have as the result thereof, a statement of the account embodied in the testimony of the witness in such form as to be convenient for use in proving the account upon the trial of the case. The result of the examination proposed will be nothing of value to the applicant upon the trial. While we are not necessarily concerned with the result of the examination, it is proper that it be considered in determining the purpose and the good faith of the applicant in seeking to have the examination made. If it is clear that the aim sought to be accomplished is not obtainable in the proceeding proposed, then it would appear that the applicant is not acting in good faith and that the purpose is something other than that for which the procedure employed is intended.

The proceeding launched by the petitioner is what the courts have often spoken of as a fishing expedition, in this instance having for its purpose the discovery of facts and information as the basis for litigation. The relator is under compulsion to come with all his books and records, expose everything he has that tells the story of his business for twenty-five years, submit it all to the scrutiny of the man who is planning a lawsuit against him. Clearly this would be a violation of the relator's right to security against unlawful search and seizure of his papers and effects, and cannot be allowed.

Every litigant has the right to inspect records and documents[3] in the possession of his adversary when necessary for the establishment of facts material to an issue before the court. But such inspection must be reasonable and under the safeguards which the law provides, in keeping with the constitutional guaranty.

The petitioner has ample remedy by proper procedure. He says that the witness is indebted to him on an account for labor and services in a twenty-four year period of employment on which there is owing to him upwards of $1,000. He does not need to examine the witness nor the books to determine the exact amount. He can sue for $1,000 and after action commenced he may then have inspection of the books before trial. Upon the trial a reference can be ordered if necessary in the examination of the account for the establishment of facts in connection therewith. In so proceeding the petitioner would obtain the evidence he is entitled to have, and in an orderly and lawful manner, and the adverse party would not be put at a disadvantage, but would be in position to maintain his rights as the law provides.

None of the cases cited by the respondent are authority for the use of the proceeding for perpetuation of testimony for the purpose for which it is here sought to be employed. The case ofState ex rel. Holcomb v. District Court, 54 Mont. 574, 575,172 P. 329, strongly relied upon by the respondent, presented no such question as we have before us in this case. There the petition was definite and specific. It set forth the facts to be proved and specified the accounts and records of the bank which the cashier, called as a witness, was required to bring. The court held that the petition was sufficient under the statute and that the order for taking the testimony was properly issued. The petition showed no such purpose in the proceeding as is expressly stated by the petitioner in the instant case.

The case of State ex rel. Cook v. District Court,102 Mont. 424, 58 P.2d 273, dealt with the question of taking the testimony of a nonresident and the question of proper service upon corporations and associations in such proceeding. It did not deal with the question presented in this case.

The case of State ex rel. Smith v. District Court,112 Mont. 506, 118 P.2d 141, held that there was not sufficient showing by the applicant for requiring the production of any books or documents as ordered by the court and the subpoenaduces tecum. No other question was therein disposed of.

In California where they have a statute for the perpetuation of testimony exactly the same as our statute the court has pointed out the necessity for a showing different from such as we have in the instant case to give the right of examination. InDemaree v. Superior Court, 10 Cal. 2d 99, 73 P.2d 605,607, there was a proceeding instituted for the perpetuation of testimony. The witness was called for the purpose of identifying and proving a certain policy of insurance, the existence of which and the provision thereof were material to be shown in expected litigation. The petition was sustained and the witness was required to produce the designated document. The court held that the petition for its production in such proceeding was sufficient, the application showing the anticipated litigation, the materiality of the evidence and the specific designation of the document to be produced. The court discusses the contention there made that the examination would require the production of the insurance policy in question and result in an unreasonable search and seizure in violation of the provisions of the Constitution. The court says that "the authorities cited in support of this contention fail, in our judgment, to meet the case. They relate, for instance, to a subpoena to produce ``all books,' without specific description of particular and material documents. (Ex parte Clarke, 126 Cal. 235, 58 P. 546, 46 L.R.A. 835, 77 Am. St. Rep. 176.) In Funkenstein v. SuperiorCourt, 23 Cal. App. 663, 139 P. 101, it was sought to inspect books without showing that any certain book was material; and inPyper v. Jennings, 47 Cal. App. 623, 191 P. 565, the subpoena referred to ``certain books,' without showing that any book or document contained evidence relevant or material to the issue before the court."

The language of the court in that case shows clearly the distinction and the line of demarcation. Had the requirement there been that the witness produce all books and records of the company wherein might be found any reference to and record of the policy in question the examination would have been denied as proposing a general search and seizure of all the books and records of the company. The cases cited as bringing out the distinction, show clearly that the court would not have authorized an examination such as is proposed in the instant case.

The order issued by the district judge would make of Chapter 172 of the Code of Civil Procedure a discovery statute, which it is not, and would authorize the examination of an adverse party and his books and records in a manner not provided for by law. The order was in excess of jurisdiction of the district judge, and is therefore annulled.

MR. CHIEF JUSTICE JOHNSON and ASSOCIATE JUSTICES ERICKSON and MORRIS concur.

Rehearing denied February 10, 1943.