Schiavo v. Caplo

1 Pa. D. & C.2d 623, 1954 Pa. Dist. & Cnty. Dec. LEXIS 244
CourtPennsylvania Court of Common Pleas, Luzerne County
DecidedDecember 30, 1954
StatusPublished

This text of 1 Pa. D. & C.2d 623 (Schiavo v. Caplo) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Luzerne County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schiavo v. Caplo, 1 Pa. D. & C.2d 623, 1954 Pa. Dist. & Cnty. Dec. LEXIS 244 (Pa. Super. Ct. 1954).

Opinion

Flannery, J.,

On July 30, 1954, plaintiff commenced an action in equity against defendants by writ of summons. No complaint was filed. On August 12, 1954, plaintiff filed a petition, obtained' an order for discovery and thereafter subpoenaed defendants to appear to testify'by deposition on oral examination and to bring with them:

1. All the records of the capital stock of Central Cabinet Making School, Inc.,' including stock transfer ledger, stock certificate books with stubs of issued certificate?, .all canceled stock, certificates and all certificates representing.outstanding shares;

[625]*6252. All books, records and documents relating to the operation of Central Cabinet Making School by Frank J. Fierro, Esq., trustee;

3. All minute books and other books, records and papers showing the stockholders, officers and directors of the corporation from the time of incorporation in 1950 until the present time;

4 All books, ledgers and records, including canceled checks, relating to the receipt of money from Frank J. Fierro, Esq., trustee, and from the Veterans Administration and relating thereto to the disbursement thereof to the individual defendants and plaintiff;

5. All letters, documents and correspondence between the Department of Public Instruction and defendants or plaintiff in 1951, and

6. All documents executed by plaintiff in or about July 1951, relating to his withdrawal from the operation of the corporation and executed by plaintiff at or about the time plaintiff executed his stock certificate in or about July 1951.

This matter is before the court on defendants’ objections to plaintiff’s petition and .order to take testimony by depositions upon oral examination for the purpose of discovery.

Defendants object: (1) That such depositions are too broad and exceed the limitations of Pa. R. C. P. 4007; (2) they exceed the necessities of a prime facie case, the test of the right to discovery under the rule; (3j the discovery sought would compel defendants to reveal their'entire defense; (4) plaintiff has no right to discovery of matters relating to internal management of the corporation without first establishing that he is a shareholder '; (5j plaintiff may not inquire into the internal affairs of the corporation until 'he proves his right to an accounting-, always the second stage in litigation of this type; (6) ‘the discovery sought will cause unreasonable annoyance, embarrassment, ex[626]*626pense and/or oppression to defendants, and (7) the discovery sought would require an unreasonable investigation in violation of Pa. R. C. P. 4011.

These objections- are now before us.

In his petition for leave to take such testimony, plaintiff alleges that:

1. In his complaint, when' it is filed, plaintiff will assert that he is entitled to an accounting of one half of certain moneys received by the corporate defendant from the Veterans Administration and Frank J. Fierro, Esq., trustee of a private' trade school owned by corporate defendant, and of one half the value of the physical assets of the school, that in effect corporate defendant is a trustee of such funds and property, that individual defendants as stockholders, directors and officers of the corporation have appropriated the funds to their individual purposes and are in effect trustees; that in 1951 plaintiff held one half of the then outstanding shares of stock, that on demand of the Department of Public Instruction he and defendant, Dominick Caplo, withdrew from the management and operation of the school, that in or about July 1951 he signed documents including his stock certificate in blank, delivering same. to Dominick Caplo, which shares were transferred to the individual defendants who have since controlled the corporation.

2. Plaintiff has no recollection of the time or day he signed said documents, the nature of the documents or the number of shares he held, the number of shares held by other stockholders then or now, nor the person or ¡persons to whom his shares were transferred in or about July 1951; nor any knowledge of the receipts and disbursements of said corporation; that the stock books, ledgers and records, letters, documents and files, are in the exclusive and hostile possession of defendants.

[627]*627The instant proceedings - involves a question' of first impression in this court, the proper construction of Pa. R.- C. P. 4007, as amended by the Supreme Court on April 12, 1954,. and effective as of July 1, 1954. Insofar as ■ it is material here, rule 4007 originally provided that'subject to the limitations provided by rule 4011. “. . . the court on petition of any party may allow the taking of depositions orally . . . of any party or person to discover facts, including the existence and location of tangible things”.

As amended, rule 4007 provides that subject to the limitations provided by rule 4011, as amended, “Any party may take the testimony of any person, including a party, for the purpose of discovery by deposition upon oral examination ... regarding any matter, not privileged, which is relevant to the subject matter^ involved in the action and will substantially aid in the preparation of the pleadings or the preparation or trial'of the case”.

Rule 4011, as amended, precludes discovery (a) sought in bad faith; (b) involving unreasonable annoyance, embarrassment, expense, or oppression; (c) •relating to privilege;, (d) relating to reports and memoranda secured in preparation for trial, and (e) involving unreasonable investigation. Dropped from rule 4011, as amended, in its entirety, is the original section (c) / precluding discovery which would disclose facts which.:

“(1) are not relevant and material to the subject matter of the pending action;

“(2) are not competent or admissible as evidence;

“(3) are known to the petitioner, or the means of obtaining knowledge of which he can be reasonably expected to have;

“(4) are not neees’sary to prepare the pleadings or prove a prima facie claim or defense of the petitioner.”

[628]*628As presently stated, rule 400? permits general discovery subject to the requirement of relevancy' and subject to the requirement that the discovery will “substantially aid” the preparation of the pleadings or the preparation of the trial of the case, -and further, subject to the requirements of rule 4011. The deletion of original rule 4011(c) eliminates the limitations of materiality, competency, admissibility, “known to the petitioner” and “prima facie claim or defense”. It would appear that the suggestion 'in the commentary to Goodrich-Amram Civil Practice, that most of the cases decided under the original rules on the scope of discovery have been made obsolete, is correct. See Goodrich-Amram, subsection 4007-1, et seq. And as the court said in Lomish v. Morris Nimelstein Sportswear Company, Inc., 367 Pa. 393, 396-97:

“Discovery in aid of an action at law is an equitable remedy whereby a litigant is enabled to obtain prior to trial information in the exclusive possession of the adverse party necessary to establishment of the plaintiff’s or defendant’s case. . . . The remedy is available to one who would otherwise be unable to prepare pleadings: Yorkshire Worsted Mills v. National Transit Company, 325 Pa. 427, 429, 190 A. 897. . . .

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Related

Yorkshire Worsted Mills v. National Transit Co.
190 A. 897 (Supreme Court of Pennsylvania, 1937)
Liegey Trustee v. Clearfield Tex.
27 A.2d 545 (Superior Court of Pennsylvania, 1941)
Lomish v. Morris Nimelstein Sportswear Co.
80 A.2d 805 (Supreme Court of Pennsylvania, 1951)

Cite This Page — Counsel Stack

Bluebook (online)
1 Pa. D. & C.2d 623, 1954 Pa. Dist. & Cnty. Dec. LEXIS 244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schiavo-v-caplo-pactcomplluzern-1954.