People v. American Ice Co.

104 N.Y.S. 858 | N.Y. App. Div. | 1907

Scott, J.:

This action is brought under chapter 69.0.of the Laws of 1899 for the purpose of avoiding a large number of contracts alleged to ' have been made by defendant with a view to establishing a mppcipoly in the ice business and to restrain the commission of acts in the future looking to the maintenance of such a monopoly.

The defendant appeals from an order granting to plaintiff a discovery and inspection of books, papers, accounts and other documents. The defendant has already by stipulation given to plaintiff the opportunity to examine and copy a considerable portion of the books, contracts and documents covered by this order, and, as was stated ■ upon the argument, the inspection is now proceeding under that stipulation. '

The defendant was incorporated in 1899, and the plaintiff seeks to examine as. to contracts made by it from the date of its incorporation. The defendant, for some reason not apparent to us, and not clearly disclosed upon the argument, insists that such examination shall be limited to a period covered by the present administration of defendant, stated to' be since March 8, 1904. It may be that none of the contracts entered into prior to that date are now in force, but as to that fact the plaintiff is entitled to resort to the evidence, and should not be .compelled to rely upon'the defendant’s general assertion. Furthermore, whether in force now or not, contracts made prior to March 8, Í904, may have a very important bearing upon the intent and purpose of contracts entered into after that date. However often the administration may change, the corporation remains' the same and the present inquiry is directed to the acts of the cor-' poration, and not to those of any particular set of officers. So far then as the examination is permitted to go, it should cover the whole period since the organization of the company.

The order, however, as made is toó broad. The plaintiff should not be given a roving commission to examine every scrap of paper in defendant’s possession in the hope that something may be found to sustain the allegations of the complaint. All contracts, whether entered into before.or after March 8, 1904, should be open to exam- • ination, as well as all correspondence had with the persons or corporations with whom such contracts were made, or their agents, including letter-press copies of letters sent by defendant, for it is easily conceivable that such correspondence may tln-ow light upon the meaning, intent, purpose and effect of the contracts themselves. We can see no propriety or materiality in permitting at the present time an examination of the books of account, vouchers, etc., tending to show the profits made by defendant or the unreasonableness of the prices' charged hy it. The test of the legality of the contracts sought to be avoided is not whether or not they resulted profitably or unprofitably to defendant, but merely whether or not they were entered into with a view to the creation of a monopoly. (People v. Sheldon, 139. N. Y. 251.) hfor do we consider that plaintiffs have shown themselves to be entitled to examine the stock lists and,stock ledgers of defendant. The avowed purpose of this examination is to show that defendant acquired stock in other corporations, but it is manifest that this fact will not be shown by examining the stock books showing who have owned' stock from time to time in the defendant corporation. ' . .

These view's suggest the' modification of paragraphs 5 and 6 of the order appealed from so as to limit the letters and copies of letters to be examined to those passing between the defendants, its officers and agent's, and persons, or corporations with whom it has made contracts challenged by this action, or their officers or agents, and the elimination of .paragraphs 7 to 18 inclusive, and 20 to 22 inclusive,' and as so modified the order will be affirmed-,-without costs to either -party in this court. It may be that, upon the examination to be authorized.by the modified order, facts will be disclosed to justify-.the examination of some of the books,.papers and documents, the justification or necessity for examining which is not now apparent. If such should prove, to be the case the plaintiff may apply for a further examination, and the order to be entered herein will be without prejudice to such subsequent application.

.Lauohlin, Clarke and Lambert, JL, concurred.

Order modified as directed in opinion, and as so modified affirmed, without costs. Settle order on notice.