Hiawatha Gin Co. v. Mississippi Farm Bureau Cotton Ass'n

103 So. 345, 138 Miss. 605, 1925 Miss. LEXIS 70

• Court: Mississippi Supreme Court
• Decided: March 23, 1925
• Docket: No. 24766.
• Status: Published

Opinion

Ethridge, J.,

delivered the opinion of the court.

The appellee filed a petition in the circuit court for a mandamus to compel the appellant to permit it to examine the appellant’s gin records. Appellee alleg’ed that it was a corporation without capital stock organized under chapter 179, Laws of 1922; that it had some twenty thousand members limited to producers of cotton, and that it had entered into a contract with each of its members for a period of five years from 1923 through 1927, by which each member obligated himself to deliver to appellee all of the cotton which should be produced by such member during the said years; the form of the contract was made exhibit to the petition, the contract being uniform between the appellee and all members; that it was necessary for appellee to handle large quantities of cotton in order to carry out its purposes and functions. •

The petition alleg'ed that the appellant is a public ginner operating public gins at a large number of different named points set forth in the petition, and that the appellee had members with whom it had contracts as aforesaid in the communities where these gins' were located. It is then alleged that the petitioner would further show’ that it is interested in knowing the amount of cotton so ginned by its members during the time aforesaid at said gins operated by the defendant so that it may determine and know whether or not its various and sundry members are delivering the cotton to it ginned and baled at said gins, as required by their contract with petitioner, and, if not, the number of bales which its members have failed to deliver, so that it may properly enforce its contract with its said inembers. The petition contained no allegation that any particular member of appellee’s co-operative association had not complied with his or her contract, nor does it contain any allegation that it has good reason to believe that a partic 'ular customer or customers or members, situated in some particular community where any particular gin plant is operated, had ginned cotton at such gin and had not delivered to the petitioner all of the cotton so ginned. There was no allegation that any bale of cotton raised by any member of the cotton association, appellee, had been ginned at any particular one of the appellant’s gin plants or at either of them.

The purpose of the petition was to examine the books and records of the appellant gin company, and to check such books and records against the books and records of the appellee cotton association to ascertain whether or not any cotton to which it was entitled had been ginned at the appellant’s gin, and whether such cotton had been delivered to the appellee cotton association.

It was alleged that the records of the appellant were public records under the law of the state of Mississippi, and that petitioner therefore is entitled to inspect the same, and it is also alleged that petitioner, cotton association, could not get such information elsewhere, and that it is without a plain, adequate, and speedy remedy in the ordinary course of law. Petitioner further alleged that it made demand for an inspection of the said records of the appellant gin company, which demand had been refused, and that all of the records of said gins were kept at the'appellant’s office in the city of Jackson, Miss., and petitioner prayed for mandamus to compel such inspection and examination.

Appellant first presented a petition for removal to the federal court, alleging that it was a corporation under the laws of the state of Delaware and a citizen of that state, gave bond and served notice under the removal statute, bond was approved, but the application for removal wa.s denied. Appellant then demurred to the petition for mandamus. There are numbers of grounds of demurrer which it is not necessary to set forth with particularity. The demurrer was overruled, appellant declined to plead further, and judgment was rendered in accordance with the prayer of the petition, from which judgment appeal is prosecuted to this court.

We do not think the cause was removable to the federal court, and the court below committed no error in refusing to remove the cause. The statute under which appellee sought its remedy is section 4750, Hemingway’s Code (Laws 1908, chapter 132), which reads as follows:

“Every public ginner shall plainly mark or stamp upon each bale of cotton packed or baled by him, the number of the bale, his own initials, and the initials of the customer for whom the cotton is ginned and baled, and shall enter in a book or register the name of the customer, the date ^hen each bale was ginned and baled, and a record of the marks placed by him upon each bale as above directed, and shall allow an inspection of such entries at any time by any person interested to make it. Any person violating any of the provisions of this section shall, upon conviction, be punished as for a misdemeanor, as provided in section 1527 of the Mississippi Code of 1906 section 1280, (this Code).”

It is first contended by the appellant that the petition does not show any title in or lien upon any cotton ginned at the appellant’s gin, and that it has not such interest as would give it the right to an inspection of appellant’s books required to be kept by this statute. It is contended that the appellee did not own any of the cotton which it (had contracted to receive from its members and which its members had contracted to deliver 'to it; that such contracts were purely executory.

We think the contract which appellee cotton association had with its members gave the appellee a right to have the cotton so delivered to it in conformity to its contract; that, while it was not the owner of the legal title to or any lien upon the cotton, it had an enforceable right to secure the delivery of the cotton and that it had such interest as would, in a proper cause, constitute it a person interested to make the examination. We think, however, the petition filed does not present a case entitling the petitioner to make the examination desired. The petition is entirely too general and uncertain.

It never was contemplated by the statute that any person should have a right to go upon a mere fishing expedition and make an examination to see whether or not he might discover some right or cause of action or something beneficial by such inspection. The party making such demand or request for inspection must make a reasonable demand, and it must be made upon a specific right or interest, or a number of such rights or interests, all of whidh must be presented with reasonable certainty, so that the gin company may know and appreciate the nature of the examination and the person or persons whose account or cotton is under inquiry or inspection. The statute contemplates that the petitioner should have some ground for believing that such records would show something that would affect his rights in particular persons or property. It is not permissible for a person to make demand for all the books that the company may have at its offices, or at any of its plants or gins, but such request should be limited to such persons or to such bales of cotton as petitioner or applicant has reason to believe have been ginned at the gin in question.

Of course a petitioner might have a number of such rights and might have one or more persons at each of the -gin plants which would give it' a right to examine the books and records of such gin so far as it would affect the particular right involved.

In the case of Federal Trade Commission v. American Tobacco Co., 264 U. S. 298, 44 S. Ct. 336, 68 L. Ed. 696, 32 A. L. R. 786, the United States supreme court had occasion to pass upon a question somewhat similar in which the Federal Trade Pommission sought by mandamus under Federal Trade Commission Act of September 26, 1914, chapter 311, section 9, 38 Stat: 717, 722 (IT. S. Comp. St., section 8836i; 4 Fed. Stat. Anno. [2 Ed.], p. 581), to require production of records, contracts, memoranda, and correspondence, for inspection and making copies, in pursuance of the resolution of the Senate of the United States passed August 9, 1921. The resolution directed the commission to investigate the tobacco situation as to domestic and export trade, with particular reference to market price to producers, etc. The Federal Trade Commission Act directs the commission to prevent the use of unfair methods of competition in commerce, and provides for a complaint by the commission, a nearing and a report, with an order to desist if it deems the use of a prohibited method proved. .By section 6 (U. S. Comp. St., section 8836f) the commission shall have ■power, first, to gather information concerning, and to investigate, the business, conduct, practices, and management of any corporation engaged in commerce, except banks and common carriers, and its relation to other corporations and individuals; second, to require reports and answers under oath to specific questions, furnishing the commission such information as it may require, on the above subjects; third, upon the direction of the President or either house of Congress to investigate and report the facts as to alleged violation of the Anti Trust Acts (U. S. Comp. St:, section 8820’ et seq.) ’

By section 9 of the act it was provided that for the purposes of this act, the commission shall, at all reasonable times, have access to, for the purposes of examination, and the right to copy any documentary evidence of any corporation being investigated or proceeded against, and shall have power to require by subpoena the attendance and testimony of witnesses, and the production of all Such documentary evidence relating to any matter under investigation. In case of disobedience an order may be obtained from a district court, and the district courts are given jurisdiction, upon the application of the attorney-general, to issue writs of mandamus to require compliance with the act, or any order of the commission made in pursuance thereof. A petition was filed under this clause of the statute and alleged that complaints have been filed with the commission charging the respondents severally with unfair competition by regulating the prices at which their commodities should be resold, and set forth the Senate resolution and the resolutions of the commission to conduct an investigation under the act. The trade commission contended for unlimited rights of access to respondent’s papers with reference to the possible existence of practices in violation of the act. The supreme court in its opinion said:

"The mere facts of carrying on a commerce not confined within state lines, and of being organized as a corporation, do not make men’s affairs public, as those of a railroad company now may be. Smith v. Interstate Commerce, Commission, 245 U. S. 33, 43, 62 L. Ed. 135, 140, 38 Sup. Ct. Rep. 30. Any one who respects the spirit as well as the letter of the Fourth Amendment would be loath to believe that Congress intended to authorize one of its subordinate ágencies to sweep all our traditions into the fire (Interstate Commerce Commission v. Brimson, 154 U. S. 447, 479, 38 L. Ed. 1047, 1058, 4 Inters. Com. Rep. 545, 14 Sup. Ct. Rep. 1125), and to direct fishing expeditions into private papers on the possibility that they may disclose evidence of crime. We do not discuss the question whether it could do so if it tried, as nothing short of the most explicit language would induce us to attribute to Congress that intent/ The interruption of business, the possible revelation of trade secrets, and the expense that compliance with the commission’s wholesale demand would cause, are the least considerations. It is contrary to the first principles of justice to allow a search through all the respondents’ records, relevant or irrelevant, in the hope that something will turn up. The unwillingness of this court to sustain such a. claim as shown in Harriman v. Interstate Commerce Commission, 211 U. S. 407, 53 L. Ed. 253, 29 Sup. Ct. Rep. 115; and was to correspondence, even in the case of a common carrier, in United States v. Louisville & N. R. Co., 236 U. S. 318, 335, 59 L. Ed. 598, 606, P. U. R. 1915B, 247, 35 Sup. Ct. Rep. 363. The question is a different one where the state granting the charter gives its commission power to inspect.

“The right of access given by the statute is to documentary evidence — not to all documents, but to such documents as are evidence. The analogies of the law do not allow the party wanting’’ evidence to call for all documents in order to see if they do not contain it. Some ground must be shown for supposing that the documents called for do contain it. Formerly in equity the ground must be found in admissions in the answer. Wigram, Discovery (2d Ed.), section 293. We assume that the rule to be applied here is more liberal, but still a ground must be laid, and the ground and the demand must be reasonable. Essgee Co. v. United States, 262 U. S. 151, 156, 157, 67 L. Ed. 917, 920, 921, 43 Sup. Ct. Rep. 514. A general subpoena, in the form of these petitions would be bad. Some evidence of the materiality of the papers demanded must be produced.”

It follows from this opinion that the demands of the petition are entirely too searching" and indefinite, and it was error not to sustain the demurrer to the petition. The judgment, therefore, will be reversed, and the demurrer sustained, and the cause remanded.

Reversed and remmded.