93 N.J. Eq. 513 | New York Court of Chancery | 1922
The bill is one for discovery and accounting. The defendant moves to strike it out for sundry reasons, among them, that there is no municipal corporation bearing the name “The Board of Commissioners of the Borough of Vineland.” The motion to strike is coupled with an anshver to be used as a defensive pleading in case the motion is denied. Counsel for defendant says in his brief that defendant, answering under a misapprehension, admitted that the complainant, by the above name, is a municipal corporation, but praj^s leave to amend Ms answer in that behalf so that he may insist upon his motion. This leave will be denied upon the principle that the court will not grant leave to plead disfavored defences after time for answering has expired (Campion v. Kille, 15 N. J. Eq. 476; Vandeveer’s Admr. v. Holcomb, 22 N. J. Eq. 555), nor grant leave to amend answers already filed so as to raise such defences. Campion v. Kille, supra; Bohme v. Rall, 51 N. J. Eq. 541, 546.
Counsel for complainant informs the court that the corporate name formerly was “Mayor and Council of the Borough of Vineland;” that it adopted the commission form of government and changed its name to “Borough of Vineland” by filing an appropriate certificate, and insists that under the authority of
The words “The Board of Commissioners of” will be stricken out and the complainant’s corporate na&ne will be amended accordingly, and hereafter the papers in this cause must be correctly entitled, viz., “Borough of Vineland.”
Another ground of objection to the bill as stated in the notice to strike is, that it was not signed by counsel. This, however, ■was not insisted upon on the argument and solicitor was permitted to sign the bill as counsel, which- he has done, and the pleading is now unobjectionable for that reason.
We come now to the meritorious question- involved on this hearing.
The bill is one for discovery and accounting. It alleges that for at least five or six years- last past the defendant w^as borough clerk of the complainant and had entire and exclusive charge, control and management of the clerical and bookkeeping departments of the borough-; that during that period he engaged in the business of buying and selling coal, either individually or in the name of some company, partnership or association under his control, and did a large and lucrative business therein; that during the world war, as clerk and manager of the water and electric light plants of the borough,, he purchased a large number of carloads of coal in the name of the borough on the pretence that the coal was-needed for the borough’s utilities,
This motion to strike out is one under the rule of court 67, substituted for a demurrer under the former practice. Bigelow v. Old Dominion, &c., Co., 74 N. J. Eq. 457 (at p. 462). And a demurrer to a bill in equity admits, every charge which is well pleaded. Goble v. Andruss, 2 N. J. Eq. 66; Force v. Dutcher, 17 N. J. Eq. 165; Camden Safe Deposit Trust Co. v. Dialogue, 75 N. J. Eq. 600; Swinley v. Force, 78 N. J. Eq. 52.
Counsel for defendant argues that the bill is vague and indefinite as to the time of the commission of the acts complained of and that the bill should be dismissed because it does not appear upon its face when the alleged acts were committed. This point, however, is not specified as a ground of objection to the bill, and therefore need not be noticed. In passing, however, it may appropriately be observed that the reason why complainant does not allege dates apparently arises from the fact that it has none and that it is therefore impossible to allege any, and that is one of the very matters of which discovery is sought. Probably no bill for discovery ever set forth circumstantially and in detail all the facts concerning which discovery was sought, for, if all the facts were within complainant’s knowledge there would be no occasion for discovery. A complainant has as much right to discovery of dates as of any other matter or thing.
In Howell v. Ashmore, 9 N. J. Eq. 32, it 'was held that when a defendant is charged with fraud, it is the peculiar jurisdiction of the court of chancery to compel such fraud-doer to disclose'
As the suit is for recovery of property tortiously taken by defendant the bill lies because of the fraud involved, especially as defendant occupies a fiduciary position. 1 C. J. 623 § 70.
But equity will not compel a discovery in aid of a criminal prosecution, or of a penal action, or of a suit in its nature partaking of such a character, for it is against the genius of the common law to compel a party to accuse himself; and it is against the principles of equity to aid in the enforcement of penalties or forfeitures. Story Eq. Jur. (14th ed.) § 1942. The suit at bar, however, is not one for discovery in aid of a criminal prosecution or a penal action, nor does it seek to subject the defendant to any penalty or forfeiture. It is a bill for an accounting for moneys alleged to have been made by defendant and appropriated to himself while acting as the agent of the complainant in respect of the matters concerning which his acts are declared to( be fraudulent, and those acts 'are by the motion to strike out admitted to be true for the purpose of the argument and decision of the question before me. The discovery sought is in aid of this purely civil suit.
The bill alleges that the fraudulent transactions of the defendant have been carried on over a period of five or six years, and defendant in his brief asserts that the allegations amount to charges of larceny, embezzlement and malfeasance in office. True. And he asserts that the charges constitute crimes against the state and also the federal government (the latter by reason of certain wartime statutory regulations), for which defendant is subject to punishment in criminal proceedings, and he cites statutes of limitation, some running two years, some three and some five. But I am not obliged to apply any particular statutory limitation to anjr particular criminally fraudulent act alleged against defendant, because it does not appear that statutes of limitation run against every offence charged in the bill. It is to be borne 'in mind that the allegations carry the transactions back over a period' of six years, and the longest period within which, according to defendant’s contention, criminal
The true rule in such a case as this, I think, is stated by the supreme court of Michigan in Warren v. Holbrook, 95 Mich. 185, Where a person occupying a fiduciary position toward complainant had converted and criminally embezzled money belonging to his employer and was held to account in equity notwithstanding his liability to prosecution for his crime, the court observing (at p. 189) :
“The fact that the acts complained of impute to the defendant the cqminission of a criminal offence, and that, if he were compelled to render an account, evidence might be produced forming the basis of a criminal accusation, does not oust the court of jurisdiction. This is a purely civil proceeding, and the only questions are, Did Holbrook retain money belonging to his employer, and, if he did, how much? He could not, of course, be compelled to discover any facts tending to' criminate himself, but this does not prevent the trial of the issue made by the pleadings under the rules of evidence in civil actions. Story Eq. Pl. § 525.”
The rules of evidence referred to I understand to mean, inter alia, the right of defendant to refuse to answer any particular question on the ground that the answer would criminate or tend to criminate him; and as this case will be referred for trial that ought to be laid down.
In Bailey v. Stiles, 3 N. J. Eq. 245, Van Arsdale, master, to whom the chancellor referred the matter for hearing, observed (at p. 248), that 'the defendants protected themselves frotm answering on the ground that their answers might incriminate them. In Vandeveer v. Holcomb, 17 N. J. Eq. 87, it was held that if a discovery is necessary equity will not require the de
A question may be put to a witness though the answer may criminate or disgrace him, but the witness is not bound to answer; however, he may waive the privilege. Fries v. Brugler, 12 N. J. Law 79. The protection against self-incrimination is the privilege of a witness, but cannot be asserted by him until the question is put. He may then be compelled to give his reason so that the court may judge whether the protection claimed is valid. Conover v. West Jersey Mortgage Co., 87 N. J. Eq. 16, 18.
■ It is universally conceded that a question whose answer would disclose a criminating fact may be put to a witness on the stand; and that the same rule applies to interrogatories in,a bill for discovery in chancery. 3 Wig. Ev. § 2268. And that the privilege is that of the person under examination as witness, and, like all other privileges, is intended for his protection only; consequent^, it does not concern the right of the party calling him; that where the party and the witness are separate persons that witness must be left to make the claim for himself and the party may not make it for him; furthermore, that the party’s counsel may not, as such, give warning of the privilege to the witness or require the judge to do so; and that where the party and witness are identical it would seem that the same results must follow. Ibid. § 2270.
The witness himself is the only person who can claim the protection of the rule against self-incrimination. Neither the court nor the parties or their counsel can object to the witness’s answering on this ground. The question may lawfully be put whatever its tendency to draw out self-incriminating testimony, and the witness must decide for himself whether he will assert his privilege or waive it and answer. Rap. L. Wit. § 265.
It is for the witness, and not for his counsel, to claim the privilege. Wrot. Ex. Wit. 22, note.
The defendant in this case has answered the bill, paragraph by paragraph, as required by rule 44, but insists upon his motion to strike out being heard and disposed of under rule 68. That rule (68), as shown above, is not the pertinent one.
The answer by paragraphs is prefaced by a statement termed “General answer to the bill of complaint." • It is filled with averments which are irrelevant, impertinent and scandalous. The specific answer to the bill, paragraph by paragraph, sets up
There is no motion by the complainant under rule 67, in substitution of the exception formerly employed, to strike out the irrelevant, impertinent and scandalous matter in the answer, but the court, of course, can strike such out of its own motion.
The averments of political activity and chicanery certainly have no bearing upon the merits of the case sub juctice, and are therefore impertinent; they are scandalous also because they are reproachful to the officers of the complainant whose conduct is denounced by the defendant.
The general answer also contains the amazing charge that the filing of the bill is not in good faith for the purpose of actually benefiting Yineland, but for the sole purpose of maintaining a colorable prosecution pending which the campaign utterances of -the present dominant political faction may be for the time apparently sustained, at least in a measure, and with the further hope that by the lapse of time the same may be forgotten in recurring future events.
If anything- is well settled in the law of this state it is that when a suitor is entitled to relief in respect to the matter concerning which he sues, his motives are immaterial. Bull v. International Power Co., 84 N. J. Eq. 6, 10. See, also, Davis v. Flagg, 35 N. J. Eq. 491. On the face of the bill the complainant has a cause of action, and if the commissioners individually were the complainants their motives could not be thus challenged; but the commissioners are not the complainants;
Now, it is perfectly apparent that no issrre could be framed upon these impertinent and scandalous averments which would have any relevant bearing upon the case made by the bill. The defendant has gone outside of the bill for these averments which he perhaps hopes to import into the litigation. If'he has committed the frauds imputed to him he will have to account, and it makes no difference if they were discovered and are being-prosecuted by political enemies. On the other hand, if the charges in the bill are untrue, whether willfully or mistakenly, is equally a matter of indifference to the court. “If the defendant is innocent the trial will vindicate him.
There is also matter in the specific answer which will be struck out. In paragraph 4 it is stated that the charge contained in the fourth paragraph of the bill is wholly false and fabricated. The rule of pleading requires that facts, and not comments or characterizations, shall be stated. This will be struck out. 'Paragraph 8 of the answer, answering the like paragraph in the bill, concludes with an averment that “though not germane to the present litigation” defendant taires occasion to deny the allegation contained in the bill that the financial affairs of the complainant are in a deplorable condition and says that on the contrary its affairs are in- a flourishing condition, and that the allegations to the contrary are set forth for a purpose intended to have some political bearing on public affairs of Yineland. It is hard to understand why counsel should have inserted .such an averment in an answer, starting as it does with an admission that it is not germane to the litigation. Not being germane, it is irrelevant; and it is also impertinent and scandalous. It will be struck out.
And as the defendant has answered, complainant has got the discovery it prayed for, unless it desires to treat the answer as not sufficient in certain particulars. For instance: The bill
And (paragraph 11) thus: He “denies the allegation of the complainant that he used the credit of the complainant for his own benefit or the benefit of any person, firm, corporation or partnership for which he was acting.”
His denial that he used the credit of the complainant for the benefit of himself or any person, firm or corporation for which he was acting, does not excuse him from setting forth and declaring for whom he was acting, whether himself, a firm, partnership or corporation, &c., which he admits doing in a general way.
When a defendant submits to answer he must answer fully. Manley v. Mickle, 55 N. J. Eq. 563; Thompson v. North, 67 N. J. Eq. 278; Salem v. State, 76 N. J. Eq. 264. And if he does not answer fully the complainant may have an order that he answer further. See Manley v. Mickle, supra.
The result reached is that the motion to strike out the bill will be overruled, with costs; the answer will stand, with leave to the complainant to apply for an order for further answer in the particulars mentioned, if it shall be so advised.