Bioren v. Canadian Mines Co. — 140 A.D. 523

Majority

p. 523

John S. Bioren and Others, Doing Business under the Firm Name and Style of Bioren & Co., Appellants, v. Canadian Mines Company and Others, Defendants, Impleaded with James J. Campbell, Respondent.

First Department,

November 4, 1910.

Headnote

Deposition — facts justifying examination before trial — privilege of witness.

Motion for an examination of a defendant after issue joined in order to enable the plaintiffs to prove the cause of action. In the moving papers it appeared that the plaintiffs were induced to loan money on the stock of the defendant corporation by a defendant D., who with other defendants carried out an agreement made between them whereby the transfer of the stock on the books of the company was stopped. It was agreed between the defendants that when the plaintiffs came to sell their certificates they should be purchased by one of the defendants, who should demand a transfer before payment, and that a defendant, R., as president of the corporation, should refuse the transfer and assert that the certificates had, been stolen from other defendants, whereupon the defendant who was to purchase the stock from the plaintiffs should make a pretended purchase of other certificates at a higher price, making claim against the plaintiffs and attempt to hold them for the difference.

Held, that the plaintiffs were entitled to examine one of the defendants employed by the other defendants, brokers who purchased the stock on the sale by the plaintiff, to show that the sales made by the defendant corporation at the same time were fictitious or “ wash sales ” made at prices fixed by one of the defendants who directed the sales and purchases.

An examination of a witness before trial should not be denied upon the ground that his testimony is privileged. This, because portions of the testimony may not be privileged and the privilege, if it exists, being personal to the witness, may not be claimed by him.

Appeal by the plaintiffs, John S. Bioren and others, doing business under the firm name, etc., from an order of the Supreme Court, made at the Mew York Special Term and entered in the office of the clerk of the county of Mew York on the 18th day of August, 1910, vacating an order for the examination of the defendant Campbell.

E. Crosby Kindleberger, for the appellants.

William J. Lippmann, for the respondent.

The order for the examination was made after issue joined, and upon the theory that the examination was necessary in order to enable.the plaintiffs to prove their cause of action. The affidavits upon which the order for the examination of the respondent was granted showed, among other things, that the action is brought to recover damages sustained by the plaintiffs in loaning money on stock of the defendant company to the defendant Dunphy, who induced the loan on the faith of said stock in consummation of an agreement made between him and the other defendants, whereby the transfer of the certificates of stock on thé books of the company was to be and was stopped, and whereby Dunphy should and did fail to pay the loan when the same fell due, and whereby when the plaintiffs came to sell the certificates at the Mew York curb, that being the place where they were dealt in, they should be purchased by one of the defendants, who should demand that they be transferred on the books of the company before payment, and the defendant Raymond, who is the president of the defendant company, should refuse to transfer the certificates and assert' that they had been stolen from the defendants Mack, and Raymond, whereupon the defendant who was to purchase the stock from the plaintiffs should make a pretended purchase of other certificates at a higher price and make a claim against plaintiffs and attempt to hold them for the difference. It was further alleged, in substance, that this agreement was in all respects consummated to the plaintiffs’ damages in tlie amount of the money loaned.

The plaintiffs desire to show by the testimony of the defendant Campbell, who was employed by the defendants Mack, who were the brokers who purchased, the stock on the sale by the plaintiffs, that the sales of the stock of the defendant company on the Mew York curb at and about the time in question, by which it was pretended that the price was advanced, were fictitious, manipulated and “ wash sales,” and that the prices were fixed by the defendants Mack, who directed most of the sales and purchases. It is manifest that these facts are material to the plaintiffs’ case. It satisfactorily appears that the defendant Campbell was in a position to have knowledge of the material facts with respect to the sales.

The memorandum of the learned justice at Special Term, filed

p. 525

on granting the motion to vacate the order for the examination, shows that it was vacated on the ground that the witness will be privileged from testifying. It is evident that he may be able to give material testimony which would not be privileged; and, moreover, the right of a party to an order for such an examination should not be denied upon the ground that the testimony sought to be elicited may be privileged, for the privilege, if it exists, is personal to the wdtness and may not be claimed by him. (Ely v. Perkins,. 127 App. Div. 823 ; Solar Baking Powder Co. v. Royal Baking Powder Co., 128 id. 550; Meade v. Southern Tier Masonic Relief Assn., 119 id. 761; Nichoff v. Star Co., 134 id. 473.)

It follows, therefore, that the order should be reversed, with ten dollars costs and disbursements, and motion to vacate the order for the examination denied, with ten dollars costs.

Ingraham, P. J., McLaughlin, Clarke and Scott, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.

Cases cited

Ely v. Perkins 127 App. Div. 823 N.Y. App. Div. 1908-07-07 p. 525