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Appellant Contends On This Appeal:
The order below as an abuse of the court's discretion, because
1. The application was not made in good faith;
2. The application is insufficient on its face;
3. The application violates the rules of the New York County Supreme Court as to examinations before trial;
4. By permitting plaintiff to select four persons from its list whom it chose to examine, the defendant was deprived of the opportunity to oppose those named in the proposed order, and adequately to raise the question on an appeal to this court. Two of the persons chosen by plaintiff are not “officers, directors, agents or employees” of the defendant; two of them reside at great distance from New York City.
Particularly do we suggest for examination by this court the situation presented by the fact that these parties are membership corporations. To what extent are members, as such, subject to the control of the corporation itself; to what extent are the statements of members, as members, binding on the corporation; or their actions? To what extent are persons "active' in affairs of local “Chapters”—especially those out of the stateamenable to orders of the court, in the sense that their failure to appear in response to the court's mandate may visit a penalty on the corporation itself for non-compliance? Diligent research has failed to disclose any cases at all on the question. It is a matter of first impression. These matters are referred to again, infra. We ask for an expression of opinion from this court on the subject because the propriety of calling so many of the persons who may be examined (in addition to those who are immediately directed to appear) would be considered settled by this order.
The application was not made in good faith.
An application to examine before trial, which enumerates so many persons to be examined to bind one corporate adverse party, which enumerates so many “issues”, and requires the production of such a vast amount of books, papers and records, should at once be looked upon by a court passing on the application as open to suspicion of bad faith. It has been so held.
In one case (Cole v. Manufacturers Trust Co., N. Y. L. J. Dec. 4, 1947, p. 1994) the plaintiff sought to examine defendant corporation by 26 persons, including its president, assistant vicepresident, 21 directors and other officers and employees. Production of records “in quantities out of proportion to actual needs” was demanded. Many items were in objectionable form. The court (Steinbrink, J.) held that all this furnishes “strong evidence of bad faith” that required denial of the motion.
In another case (Nasoff v. Balban, N. Y. L. J. Dec. 11, 1939, p. 2077) Collins, J. held that where the items sought were too prolix and manifold, the persons sought to be examined too numerous, the subject matter too broad; and where the books and records sought to be produced constituted all the books and records of the corporation involved, the good faith of the applicant is seriously in question and the motion should be—as it was in that case-denied.
There are other cases to the same effect. The question whether, under all the circumstances of the case, the examination is sought in good faith or merely to harass the party to be examined, is always open for determination in the sound discretion of the court. Such examinations are never a matter of right (Public National Bank V. National City Bank, 261 N. Y. 316; Western Ivory Button Co. v. Silverberg, 170 N. Y. Supp. 56; Crandall v. Ford Motor Co., 260 App. Div. 380; many other cases).
Further evidence of the complete absence of good faith in the defendant in making the instant application is to be found, if necessary, in paragraph 7 (109) of the application. There it is stated that
“This examination before trial is material to the issues raised by the pleadings and is necessary to the plaintiff inasmuch as the facts are not fully and perfectly (sic) known to the plaintiff.” (Emphasis supplied.)
It is apparent that this examination is really intended to annoy or harass the defendant. As such it is not to be countenanced (Wood v. American Locomotive Co., 246 A. D. 376; Bowes V. National City Bank, 169 Misc. 78; other cases).
What is there here, if not a frankly announced “fishing expedition” which the courts have always roundly denounced? Nowhere is there in the moving affidavit any statement that the plaintiff intends to offer in evidence on the trial the testimony taken on the examination. It abundantly appears, on the other hand, that the testimony is sought only to prepare for trial: “a fishing expedition” in other words.
The good faith of the defendant is not saved by the provision limiting the initial examination to four persons of the twenty-eight. The direction so limiting the plaintiff also provides that others may be examined as the necessity therefore is made to appear. We venture to say, with due respect to the learned Special Term which made the order, if the order stands, that—with the liberal practice in vogue in these examinations—it would require showing of very little “necessity” to get up to the remaining twentyfour under examination. The provision does not transform bad into good faith. We say that demand for the examination of twenty-eight is itself substantial evidence of bad faith.
Bad faith of the defendant is further evidenced by its choice of the four persons initially to be examined. The defendant, for instance, sedulously omitted the defendant's president, who resides in the nearby city of Passaic, and who would be immediately available; also Messrs. Miller, Fishman, Turkin, Weinberger, and Strauss, and Mrs. Weinberger, all of whom reside locally. Instead the defendant hit upon a resident of Pittsburgh and a resident of Boston. It is inconceivable that these two possess exclusive knowledge not shared by any of the others we have mentioned, so as to make their testimony immediately indispensable to the plaintiff.
Bad faith is additionally revealed by the (literally) enormous amount of the defendant's books, papers and documents sought to be produced.
To produce in Special Term Part II where the examination is to be held the books and records so ordered would require a truck and would subject the defendant to great and unnecessary ex
It is stated in the reply affidavit (184) that the charge of lack of good faith has no factual basis. To this we answer that the burden is on the moving party to demonstrate its good faith. To one who reads the complaint and its sweeping demands for judgment, or
or the extraordinarily prolix demands in the motion below, the bad faith of the defendant becomes apparent. This may have been felt subconsciously when the application was drawn; for nowhere is the claim madeas it is so regularly in these applications—that it is made in good faith”.
We point out also, that, however brief was the answering affidavit below, it was confined to those facts which it was deemed important for the court to know, leaving the argument on the law to be presented otherwise to the court: argument much to the same effect as here contained.
Before leaving the question of good faith may we point out that many of the issues on which examination was ordered while technically allowable are altogether unnecessary from any point of view. We refer, for instance (10 et seq.), to such items as items 3 (plaintiff initiated, sponsored and financed medical research); 4 (plaintiff established clinics, etc.); 5 (plaintiff conducts periodic clinics, etc.); 6 (plaintiff has raised millions of dollars, etc.); 10 (plaintiff has a wide reputation, good will, etc.). We have enumerated a few. There are many that fall into the same category.