51 F. 381 | 8th Cir. | 1892
(after stating the facts.f The first position taken by counsel for the plaintiff in error is that the decrees or orders entered by the chancery court of the city of Richmond, and by the circuit court of Henrico county, Va., making assessments upon the capital, stock of the insolvent corporation, were mere nullities, for want of jurisdiction on part of said courts over the subject-matter and over the company named as defendant therein. The contention on part of the plaintiff in error is that the pendency of the suit brought by Reynolds in the. United States court in 1866, and the appointment of the receiver in that ease, with the powers conferred upon him, precluded the chancery court of the city of Richmond from taking jurisdiction over the company in the suit brought by W. \V. Glenn in 1871; and that the assets of the corporation, including the liability of the stockholders for assessments upon the capital stock, became subject to the jurisdiction of the federal court in such sense that no other court could assume control over the same. This contention involves two propositions; First, that the pendency of the Beynolds Case in the federal court ousted the jurisdiction of the state court over the case brought by W. W. Glenn; and, second, that, granting jurisdiction over the caso in the state court, the assets of the company wore wholly withdrawn from the operation of any decree or order affecting the same made by the state court, by reason of the appointment of the receiver in the federal court. If it appears that two suits are pending in the same jurisdiction in which there is identity of subject-matter, of parties, and of relief sought, the pendency of the first suit may he pleaded in abatement of the second, on the ground that the bringing of the latter subserves no good purpose, subjects the party to increased expense, and is therefore vexatious; but the pendency of a suit in a state court cannot be pleaded in abatement of a suit in a federal court, because the jurisdictions are, in this sense, foreign to each other. Insurance Co. v. Brune’s Assignee, 96 U. S. 588; Gordon v. Gilfoil, 99 U. S. 168.
Furthermore, if the pendency of another suit in the same jurisdiction is pleaded in abatement, it must appear that the former suit presents the same case; that is, there must he identity in the interests represented, in the rights asserted, and in the purpose sought. Thus, as is said by the supreme court in Watson v. Jones, 13 Wall. 679:
“But, when the pendency of such a suit is set up to defeat another, the case must be the same. There must be the same parties, or, at least, such as represent the same interest; there must be the same rights asserted, and the same relief prayed for. This relief must he founded on the same facts, and the title or essential basis of ttie relief sought must be the same. The identity in these particulars should be such that, if the pending case had already been disposed of, it could be pleaded in bar as a former adjudication of the same matter between the same parties.”
Jurisdiction of the case existing in that court, does it appear that it had jurisdiction to make assessments upon the capital stock of the company, and to authorize the collection thereof by the trustee by it appointed to execute the deed of assignment? It mnst be borne in mind that .this court is dealing only with the question of the jurisdiction of the chancery court of the city of Richmond over the. proceedings had before it. On part of the plaintiff in error it is contended that the action had in the federal court in the Reynolds Cause in the appointment of a receiver subjected to the jurisdiction of that court the assets of the company, including the liability of the shareholders to' calls upon the shares of stock owned by them, and therefore the Richmond chancery court could not bring the same within its jurisdiction. The general doctrine that, in cases of concurrent jurisdiction, the jurisdiction of the court first taking control of the property involved is exclusive, does not justify the claim asserted by the plaintiff in error. If it be admitted that the .proceedings taken in the federal court in the Reynolds Case had the effect of bringing within the exclusive control of that court the assets Of the National1 Express & Transportation Company, and that it was within the power' of that court to have wound up the affairs of the company, yet such exclusive control terminated when that court discharged the receiver, vacated all orders made by it, and dismissed the. case.
“It is only while the property is in possession of the court, either actually or constructively, that the court is bound or professes to protect that possession from the process of other courts. Whenever the litigation is ended, or the possession of the officer or court is discharged, other courts are at liberty to deal with it according to the rights of the parties before them, whether those rights require them to take possession of the property or not.”
As already stated, the federal court on the lOtli of December, 1880,' vacated the order appointing a receiver and dismissed the case pending before it, thereby terminating all control and possession, actual or constructive, of that court over the assets of the corporation. From that time forward there was nothing to prevent the chancery court of the city of Richmond from asserting jurisdiction over the corporation or its assets, and from dealing with the same as justice and the rights of creditors might demand. The errors assigned, based upon the assumed nullity of the decrees entered by the Richmond chancery court and the circuit court of Henrico county, for want of jurisdiction over the corporation and its assets, thus appear to he without merit, and must be overruled.
The next question for consideration presented by the argument of counsel arises on the plea of the statute of limitations of the state of Missouri, which provides that actions upon contracts, obligations, or liabilities. express or implied, are barred by the lapse of five years. In the oases of Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. Rep. 739, and Glenn v. Liggett, 135 U. S. 533, 10 Sup. Ct. Rep. 867, the question of the time when the statute began to run in favor of the stockholders was involved, and the supreme court held that, as against creditors represented by the trustee, the statute did not begin to run until the entry of the decrees of the chancery court and the circuit court of Henrico county. Counsel for plaintiff in error contends, in an able argument, that these decisions are not conclusive of the proposition, for the reason that the
It is argued that .the clause iii that decree, declaring that, “if there shall be any sums due upon the shares of the capital stock of said com-pan j^, the said receiver will proceed to'collect and recover the same, unless the persons from whom the said sums shall be due are wholly insolvent, and for this purpose may prosecute actions at law or in equity for the recovery of such sums,” was, in substance and effect, a call or demand upon the stockholders; that the receiver was authorized to sue for all portions of the capital stock remaining unpaid without further order or call upon the stockholders, and, as the right of action had thus been created, time began to run in favor of the stockholders from that date. In our judgment, the decree of December 31, 1866, is not susceptible of this broad construction. From the allegations of the bill and answer in the Reynolds Case, it appeared that there were stockholders who had failed to respond to the calls previously made by the company, and that steps had been taken to sell the delinquent stock for such unpaid installments, and, in our judgment, it was this indebtedness that the receiver was authorized to collect. The very language of the clause indicates this, in that it is said, “If there shall be any sums due upon the shares,” etc. Certainly, if it had been the purpose of the court to make a call for the 80 per cent, of the stock which then remained uncalled for and unpaid, other and more apt language would have been used than that found in the decree. Furthermore, it is not to be believed that the court, with'out any examination into the affairs of the company and without knowing whether heed existed for calling in the whole of the unpaid portion of the capital stock, amounting to $4,000,000, would have ordered such payment, and directed the receiver to enforce the same by legal proceedings. We conclude, therefore, that the decree of the federal court had reference only to calls already made, and that it cannot be hold to be a call for the 80 per cent, which then remained uncalled for and unpaid. In our judgment, there was not an authorized call made upon the stockholders until the entry of the order in the Richmond chancery Coúrt on the 14th of December, 1880, and on that date, as is ruled in Hawhins v. Glenn and Glenn v. Liggett, supra, the statute began to run against the 30 per cent, assessment then ordered.
It has already been determined by the supreme court, in the case last cited, that, under the provisions of the Missouri statute, the bringing of the suit by the trustee in 1884, in which plaintiff suffered a nonsuit, and ' the recommencement thereof within a year from such nonsuit, saved the
The next assignment of error discussed by counsel presents the question whether the stock ledger and stock transfer books of the corporation were admissible in evidence on the issue whether the defendant below was a stockholder in the company. It cannot be questioned that, in the ordinary conduct of business in the community, books of this character are consulted for the purpose of determining who are the owners of the stock in corporate companies. In many of the states, statutes havd been enacted requiring books of this character to be kept for the inspection of the public, and it is also a recognized rule of law that persons who knowingly permit their names to appear upon tlio books of a company as holders of stock therein may be estopped from proving the contrary, as against parties who have acted upon the faith of what thus appears upon the face of the books of the corporation. On principle it would' seem to be true that ordinarily whatever is received and acted upon by the business community, as proper evidence of a given fact, may be admitted in evidence whim the existence of the tael is a matter to be proven in the trial of a cause in court. Thus in the caso of Turnbull v. Payson, 95 U. S. 418, it is said;
“Where the name of ail individual appears on the stock book of a corporation as a stockholder, tho prima facie presumption is that he is the owner of the stock, in a case where there is nothing to rebqt that presumption; and, in an action against him as a stockholder, the burden of proving that he is not a stockholder, or of rebutting that presumption, is cast upon the defendant.”
To create this presumption, it must appear that the book contains the name of the person whom it is claimed is a stockholder. In other words, it must be shown by the contents of the stock book, or by extrinsic evidence, or by both combined, that the name found in the book was so entered therein as the name of the party to the litigation. What, amount of evidence may be needed to establish this necessary connection will, of course, vary with circumstances. The trial court held that in this case the plaintiff below could not roly upon tho mere identity ol* name, hut must produce other evidence sufficient to show that the person sued is the same person whoso name is registered in the stock books.. If proper evidence of this connecting fact was produced, then, in our judgment, the court below ruled rightly in admitting the stock books in evidence.
The next question discussed by counsel arises upon the action of the trial court in admitting in evidence what is termed the “fee contract,”' over the objection that the same, for the purpose for which it was offered in evidence, was a privileged communication between attorney and client. Tho facts touching this contract appear to, be as follows; In the year 18(57 the National Express & Transportation Company drew a number of drafts upon parties residing in St. Louis, Mo., claimed to be-
“We, the undersigned, .desirous of resisting any further payment to the national Express and Transportation Company, hereby agree to pay Bogy, Ewing & Holliday, our attorneys, two thousand dollars, they to be at all expenses of traveling, and to defend all suits brought against us by the Bank of Commerce of Baltimore, or by the said express company or its receiver, for any calls made up to the present time. The expense of such defense to be borne by us pro rata on the amount of stock subscribed by us as set opposite our names herein, and no assessment to be made or defense undertaken, unless signatures be obtained hereto representing fifteen hundred shares of said stock. Said pro rata at no time to exceed the proportionate share of two thousand dollars at this, the time of our signing. Signed at St. Louis, Mo., this 28th day of August, 1867.”
This contract passed into the personal control of Mr. Holliday, who testified that he acted as attorney under the contract for Mr. Liggett and other parties; that one of the signers thereof was one W. S. Stewart, who subsequently died, and in 1886 Mr. Holliday proved up his claim for fees against his estate, and, as a voucher therefor, the contract was filed by Mr. Holliday in the probate court of the city of St. Louis. It also appeared in the evidence that, without the knowledge of Mr. Holliday, counsel for plaintiff in the present action-had procured the contract from the probate court, and on the trial of this cause in the court below, after offering evidence tending to prove the genuineness of the signature of plaintiff in error found attached thereto, offered the contract as an admission in writing made by plaintiff in error to the effect that he was a stockholder in the express company, holding the number of shares set opposite his signature. The trial court, over the objection that the statements in the agreement, being confidential communications between counsel and client, were privileged, admitted the same, and the question is as to the correctness of the ruling.
Counsel in their briefs have discussed at some length the provisions of the statute of Missouri on this subject, which declares that an attorney shall not be permitted to testify “concerning any communication made to him by his client in that-relation or his advice thereon, without the consent of such client.” In view of the decision of the supreme court in Insurance Co. v. Schaefer, 94 U. S. 457, it would seem that the provisions of the state statute are not applicable to this question of evidence when the same arises in the courts of the United States. In that case it was urged that, under the laws of Ohio, the communication offered in evidence was not privileged; but the supreme court said that—
*395 “An examination of the Ohio statutes renders it doubtful whether the law is as the defendant contends; but, if it wrere, the court did right to exclude the testimony. The laws of the state are only to be regarded as rules of decision in the courts of the United ¡States where the constitution, treaties, or statutes of the United States have not otherwise provided. When the latter speak, they are controlling; that is to say, on all subjects on which it is competent for them to speak. There can be no doubt that it is competent for congress to declare the rules of evidence which shall prevail in the courts of the United States not affecting rights of property, and, where congress has declared the rule, the state law is silent. Now, the competency of parties as witnesses in the federal courts depends upon the act of congress in that behalf passed in 1864, amended in 1865, and codified in Rev. St. §858. It is not derived from the statute of Ohio, and is not subject to the conditions and qualifications imposed thereby. The only conditions and qualifications which congress deemed necessary are expressed in the act of congress, and the admission in evidence of previous communications t,o counsel is not one of them; and it is tobe hoped that it will not soon be made such. The protection of confidential communications made to professional advisers is dictated by a wise and liberal policy. If a person cannot consult his legal adviser without being liable to have the interview made public the next day by an examination enforced by the courts, the law would be little short of despotic. It would be a prohibition upon professional advice and assistance.”
In the case of State v. Dawson, 90 Mo. 149, 1 S. W. Rep. 827, the supreme court of that state held that the section of the state statute already cited is only declaratory of the common law; that “it is not designed to, nor does it, narrow the common-law privilege.” So far, therefore, as the particular point now under consideration is concerned, the correctness of the ruling made by the trial court is not dependent upon the question whether the state statute Is applicable or not. The general doctrine upon the subject is fairly stated in 1 Wait, Act. & Def. p. 468, in the following terms:
“ It is the general rule that communications between attorney and client, in reference to all matters which are the proper subject of professional employment, are privileged. This includes all communications made by a client to his attorney or counsel, for the purposes of professional advice or assistance, whether such advice relates to a suit pending, one contemplated, or to any other matter proper for such advice or aid.”
It is also well settled that the privilege is for the benefit and protection of the client. Thus it is said by the supremo court in Chirac v. Reinicker, 11 Wheat. 280:
“The general rule is not disputed, that confidential communications between elfcsnt and attorney are not to be revealed at any time. The privilege, indeed, is not that of the attorney, but of the client, and it is indispensable for the purposes of private justice. Whatever facts, therefore, are communicated by a client to counsel, solely on account of that relation, such counsel are not at liberty, even if they wish, to disclose, and the law holds their testimony incompetent.”
In considering questions of this kind, regard must be had to nature of the evidence sought to he elicited. It not ^infrequently happens that deeds, contracts, or other written instruments may be delivered by a client to an attorney under such circumstances thin the attorney cannot be compelled or permitted to produce the same in evidence against his
The admissibility of the communication, in our judgment, is not dependent upon the manner in which control thereof is obtained from the counsel, but upon the inherent character of the communication itself. If the admission or statement sought to be put in evidence was made by reason of the confidential relation existing between client and counsel," it becomes a privileged communication, and as such it is not competent evidence against the client. Its competency is not dependent upon the mere manner in which knowledge thereof may be obtained from counsel. The principle forbidding its use is not adopted as a mere rule of professional conduct on part of the attorney. It confers a right upon the client for his protection and advantage, and which he alone is authorized to waive. It will not do to hold that the communication loses its confidential and privileged character if knowledge thereof can be obtained by means which do not involve the counsel in a breach oriprofessio'ual duty. For illustration, a letter is written by a client to his attorney containing statements bf a privileged nature. The counsel, having this letter on his person, meets with an accident, causing his death. Tliifd parties in this way become possessed of the letter, and from them it passes to the possession of the adversary party. Has this letter lost
The argument, founded upon the assumption that the admissibility of confidential communications between client and counsel is dependent solely upon considerations of the duty of counsel not to make known that which was communicated to him professionally, is, in our judgment, faulty, in that it ignores the main purpose of the rule, which is that the client shall bo at liberty to freely communicate to his attorney knowledge of all matters connected with the business in hand upon the assurance that confidential communications thus made are privileged and cannot be used in evidence against him, unless he deprives them of their privileged character. In the case at bar, therefore, the question for determination is whether the admissions contained in the so-called “Fee Contract” are privileged. If they were, iheu it was error to admit the same in evidence, even though it may he true that possession of the contract was obtained by counsel for the trustee without any breach of professional duty on part of Mr. Holliday.
Extended discussion is not needed to show that the admissions contained in this contract are privileged. Suppose Mr. Holliday had been called as a witness by the trustee and he had testified that he had been retained by Mr. Liggett to defend him against all suits brought against him by the .Bank of Commerce of Baltimore, or by the express company or its receiver, to enforce the calls up to that date made upon the Capital stock of the company, and thereupon counsel for the trustee had asked him to state what admissions his olieut had made to him in regard to ownership of stock in the corporation and the number of shares held by him, certainly, upon objection made, it would have been held that admissions thus made were privileged. The fact that the admissions sought to be put in evidence are contained in a letter written to counsel’, or in any other written instrument, does not change their character, so long as it appears that the letter, contract, or other writing is in fact a .communication between client and counsel, and was created or called into existence by reason of that relation.
The conclusion we reach is that the statements or admissions contained in the so-called “Fee Contract,” being a communication from client to counsel, and which it is clear would not have been made had this relation not existed between the parties, were, when the same were made, confidential and privileged ; that being so, they were, for that reason, not competent evidence on behalf of the trustee in this case, it not appearing that the plaintiff in error had, by action on his part, deprived them of their privileged character; and that it was therefore error to admit the same in evidence in the present case.
The trial court relied upon the admissions contained in this contract for the purpose of connecting the defendant in the action with the stock books offered in evidence,—holding that under the circumstances of the case the plaintiff could not rely upon the mere identity of name, as a sufficient identification of the defendant as the person whose name appears on the stock books. It is strongly urged in argument by counsel for the trustee that the production of the stock books made out a prima jade case against the defendant, and therefore the admission of the incompetent evidence is not such an error as requires the reversal of the
In entering up judgment on the assessments sued for, the trial court allowed interest on the same from the time this action was brought. The trustee moved to set aside this judgment, and to enter a new judgment, including interest from the date of the decrees ordering the calls or assessments; which motion the court refused, and thereupon the trustee sued out a writ of error for the purpose of presenting'this question to this court. In Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. Rep. 739, the supreme court cites the section of the Code of Virginia, which provides that, if an assessment upon shares “be not paid as required by the president and directors, the same, with interest thereon, may he recovered by warrant, action, or motion as aforesaid,” and states that “interest would therefore seem chargeable from the date of the call.” The statute of Virginia enacts that interest is recoverable if the assessment is not paid as required by the president and directors of the corporation, or, in other words, interest begins to run from the time fixed for payment of the particular cal 1. It is a’ well-settled principle, in making assessments upon corporate stocks, that there must bo equality in the burden imposed upon the stockholders. The time when a given assessment becomes payable may depend upon the provisions of the charter or by-laws of the particular corporation, or upon the terms of the call itself, or possibly on the practice adopted in collecting assessments by the parties charged with that duty. Thus the charter or by-laws of a corporation may provide that all assessments shall be payable in a certain number of days after the call is ordered, or after notice given by publication or otherwise, or, if the charter and by-laws are silent on the subject, the calls as ordered from time to time may fix the date of payment. The general rule of law, under the statute of Virginia, is that interest is recoverable from the time of default in payment; but the
For the error pointed out in the admission of evidence the judgment is reversed, and the case is remanded to the circuit court for a new trial.