In a suit in the circuit court of the United States brought by
the United States against corporations for violations of the
Anti-Trust Law of July 2, 1890, a witness refused to answer
questions or submit book to inspection before an examiner appointed
by the court on the ground of immateriality, also pleading the
Fifth Amendment; after the court had overruled the objections and
directed him to answer he again refused, and judgment in contempt
was entered against him. On appeal to this Court,
held
that:
Questions under the Constitution of the United States were
involved, and this Court has jurisdiction of an appeal direct from
the circuit court.
In such an action, the books of the various defendants both
before and after the alleged combination, and the contracts between
them, as well as other papers referred to in the opinion, are all
matters of material proof, but, whether material or not, the
testimony must be taken, and exceptions can be noted by the
examiner and the materiality of the evidence passed on by the
court.
Witnesses cannot take objections to materiality of evidence in
order to be relieved from testifying. The tendency or effect of the
testimony on the issues between the parties is no concern of
theirs.
Documentary evidence in the shape of books and papers of
corporations are in the possession of the officer thereof, who
cannot refuse to produce them on the ground that they are not in
their possession or under their control.
Hale v. Henkel, ante, p.
201 U. S. 43,
followed to the effect that officers and employees of corporations
cannot, under the Fourth and Fifth Amendments, refuse to testify or
produce books of corporations in suits against the corporations for
violations of the Anti-Trust Law of July 2, 1890, in view of the
immunity given by the Act of February 25, 1903.
These writs of error submit for review a judgment in contempt
entered in the case of the
United States v. General Paper
Co., described in
Alexander v. United States, post,
p.
201 U. S. 117. The
judgment was based upon the disobedience by the plaintiffs in error
to orders of the court requiring them to answer certain
Page 201 U. S. 93
questions and to produce certain books, documents, and papers in
their examination before the special examiner in pursuance to a
subpoena
duces tecum duly issued and served. The orders
requiring the plaintiffs in error to answer were made upon petition
of the United States, which exhibited the issues in the suit of
United States v. General Paper Co., stated the questions
asked plaintiffs in error, and the books, documents, and papers
required of them.
Plaintiffs in error refused to obey the orders, and the examiner
reported their disobedience to the court "for such action as the
court might take for the further enforcement of its orders." In
defense, plaintiffs in error filed separate answers, which
respectively alleged that Nelson was the president and manager of
the Hennepin Paper Company; Bossard, manager and treasurer of the
Itasca Company, and McNair, a director and general manager of the
Northwest Paper Company. In other particulars, the answers are
identical except so far as the relations of plaintiffs in error to
their respective corporations made a difference. Plaintiffs in
error are also directors of the General Paper Company. We insert
the answer of Nelson in the margin. [
Footnote 1]
Page 201 U. S. 94
The court required the questions to be answered and the books
and documents to be produced, and, being of opinion that the order
did not constitute a final decision, refused to allow an appeal on
the part of either of the plaintiffs in error or either of
Page 201 U. S. 95
the defendants in the suit, or on the part of all of them
jointly.
Plaintiffs in error refused to obey the order of the court, and
upon the report of the examiner, the judgment under review was
Page 201 U. S. 96
entered fining plaintiffs in error severally $100 "for their
said disobedience of the said order, said fines to be paid to the
clerk of this Court for the use of the United States, as punishment
for such contempt," and sentencing them to be imprisoned until
Page 201 U. S. 97
the order of the court requiring them to testify should be
complied with.
The questions on the merits in these cases are the same as those
on the merits in 381
et seq., just
Page 201 U. S. 98
decided. In those cases, however, this Court had no
jurisdiction, and the appeals were dismissed. In the present cases,
we have jurisdiction,
Bessette v. W. B. Conkey Co.,
194 U. S. 324, and
directly from the circuit court, as questions under the
Constitution of the United States are involved.
Page 201 U. S. 99
In the pleadings in the original suit brought in the circuit
court of the United States for the District of Minnesota, it is
respectively alleged and denied that the defendant corporations, of
which plaintiffs in error are officers, had entered into an
agreement, combination, and conspiracy to control, regulate, and
monopolize not only the manufacture of news prints and other
papers, but the distribution and shipment thereof through the
middle, southern, and western states, in violation of the antitrust
Act of July 2, 1890. The United States sought to establish by
plaintiffs in error the truth of the charge, and the subpoena
served upon them was explicit as to what was required of them.
The subpoenas required plaintiffs in error to produce the
account books, including the journals, ledgers, and other books
kept by or under the control of the companies respectively, of
which plaintiffs in error were respectively officers, (a) showing
the amounts, kinds, and grades of paper manufactured by the
respective companies and sold by or through the General Paper
Company, and which were shipped since the fifth of July, 1900; (b)
the prices, amounts, or credits received for such paper from the
paper company between the fifth of July and the present time,
including entries showing the manner in which the prices and
amounts received by the respective companies for any and all
Page 201 U. S. 100
of its products so sold have been equalized with the prices and
amounts received or realized of any and all of the other defendant
companies for which the paper company is or has been the exclusive
agent; (c) the amounts and proportions of earnings or profits of
the paper company, received by the respective companies from and
through the paper company, either in the form of rebates, credits
or otherwise.
Second. All contracts, agreements, writings, and account books,
including journals, ledgers, and other books, kept by or under the
control of the respective companies, showing the agreement,
arrangement, or understanding under and pursuant to each, and the
manner in which the prices and amounts realized by the respective
companies upon the various kinds and grades of paper manufactured
by it and sold by and through the paper company, are and have been,
since July 5, 1900, equalized, or the profits arising from the sale
of such paper distributed or apportioned, as between the respective
companies and other defendants manufacturing and selling through
the paper company similar kinds or grades of paper or among all of
the defendants manufacturing similar kinds or grades of paper, and
then and there to testify and the truth to say, in a certain matter
in controversy in said court, between the United States as
complainant against the General Paper Company,
et al.,
defendants, on the part of the complainant.
There is no uncertainty therefore either in the issue or the
means of proof. In other words, the United States charges a
conspiracy upon the part of the defendant corporations for the
cessation of competition between the manufacturing defendants by
creating a general selling and distributing agent, the General
Paper Company, which restricts the output of the mills, fixes the
prices of their products, determines to whom, and the terms and
conditions upon which, such products shall be sold, into what
states and places they shall be shipped, and what publishers and
customers each mill shall supply. The means of proof of the charge
are obviously the conditions of the companies before and after the
formation of the paper company,
Page 201 U. S. 101
its organization and the purpose of its organization, the means
of its operation, how and by what means it equalizes the output and
price of products, and the distribution of the proceeds of their
sale, and the relations the accounts between it and the other
defendant companies, and their books, accounts, and minutes of
proceedings.
The questions were directed to these ends. They were directed to
ascertain whether the prices received for the various paper
materials were equalized, and whether, during the time the General
Paper Company was the selling agent of the materials, there was in
existence an arrangement whereby the prices received through the
paper company were equalized between the other defendant companies.
The questions were put in various ways to show such equalization
and the arrangements to equalize, and to show the allowances to
each mill, the fixing of definite prices, and the distribution of
the balances received among the companies on the basis of their
average daily output of the grade of paper inquired about. And
there were also questions asked as to whether the board of
directors or the executive committee of the paper company fixed the
prices of paper to be paid to each of the mills by or through the
paper company, and the compensation to be paid to the mills making
butchers' fibre paper, because it was less profitable, and other
questions as to conversations between gentlemen representing the
different mills in regard to the organization of a corporation to
act as general selling agent in order to eliminate competition.
There were also questions as to whether the books showed the things
expressed in the other questions. The objection made to each of the
questions before the examiner was that the testimony sought was
irrelevant, incompetent, and immaterial, and counsel advised the
witnesses not to answer. As to the books and papers, the following
is a sample of the proceedings:
"Q. Do the books, journals, or ledgers of the Hennepin Paper
Company show any agreement or arrangement or understanding under
and pursuant to which and the manner in which the prices and
amounts realized by the Hennepin Paper Company
Page 201 U. S. 102
upon various grades of paper manufactured by it and sold by or
through the defendant the General Paper Company are and have been,
since the 5th day of July, 1900, equalized, or the profits arising
from the sale of such paper distributed or apportioned, as between
the defendants?"
"Mr. Flanders: All objections renewed, and I give the witness
the same advice."
"(No answer.)"
"Q. Do you refuse, Mr. Nelson, to produce the books?"
"Mr. Flanders: As I said before, you may assume for the purposes
of these questions that the books and all the papers called for are
present in court; but, on behalf of the Hennepin Paper Company and
the witness and the General Paper Company, I decline to submit
those to the inspection of the government counsel."
"Mr. Kellogg: Or to allow them or any part of them to be put in
evidence, Mr. Flanders?"
"Mr. Flanders: Yes."
"Other facts will appear in the opinion. "
Page 201 U. S. 111
MR. JUSTICE McKENNA, after stating the case as above, delivered
the opinion of the Court.
Plaintiffs in error urge three main contentions, which we will
consider in their order.
I. That the evidence, documentary and oral, which the witnesses
were required to produce, was not shown to be material to
plaintiff's case.
1. There are three answers to this contention. (1) The evidence
is clearly material. The charge of the bill is that the defendant
manufacturing corporations entered into a conspiracy and
combination in violation of the Act of July 2, 1890, to suppress
competition between themselves, and that they accomplished this
purpose by organizing the General Paper Company, and gave it
certain controlling powers over the output of the mills and the
prices and distribution of their products.
Before the application to the court for the orders under review,
there were certain facts established. It was established that, in
the fall of 1899 and the spring of 1900, there were preliminary
meetings of the parties to ultimately form the paper company, and
that it was subsequently formed by those representing the
manufacturing companies, who subscribed for the stock. In July,
1900, the corporations, as represented in the paper company,
fourteen in all, entered into contracts with it making it their
exclusive selling agent; that each constituent manufacturing
company was represented by one of its principal officers upon the
board of directors of the paper company, and the number of
directors have been increased as other corporations have made the
paper company their selling agent. A table of the constituent
companies was given, and the times the companies became members of
the paper company. And it was established that there was an
executive committee, comprised
Page 201 U. S. 112
substantially of the same persons who constituted the board of
directors, and that the paper company had books and records
containing the minutes of the meetings of stockholders, directors,
and the executive committee, and that the treasurers and sales
agents had presented reports to the stockholders, directors, and
executive committee. It was stipulated that all the subscriptions
to stock of the paper company were for the benefit of some paper
manufacturing company, and in its name, that it was the beneficial
owner thereof, and that the dividends declared thereon were its
property; that said stock was from time to time allotted to such
corporations as made contracts with the paper company, making it
their exclusive selling agent, upon the basis of estimated relative
productions of paper. A list of the individuals to whom stock was
issued, the names of the corporations represented by them, and the
days of the issuances of the stock were given.
The questions were framed to prove the combination charged in
the bill and the powers and operation of the General Paper Company
and the relations of the other companies to it. What the answers
will show we do not know, nor what the books and documents will
disclose. The organization of the paper company had a purpose, and
whether it was a legal or illegal instrument for competing
companies to use we do not have now to determine. By the admissions
of the answers the paper company entered into contracts with those
companies, became their selling agent, and was entitled to a
certain percentage of the sales. Presumably it exercised its
powers, made sales and received profits. In all that it did the
manufacturing corporations were interested; they owned its stock,
were entitled to its dividends. This we may admit, for argument
sake, not prejudging in any way, may be consistent with continued
competition between the companies, but it may be otherwise. At any
rate, the manner in which the paper company executed its functions
may be links in the evidence adduced by the United States, and this
is enough to establish the materiality of the evidence.
It must not be overlooked that not only an inspection of the
Page 201 U. S. 113
books was refused, but questions directed to ascertain the
contents of the books were objected to, not answered. We have given
one illustration; we will give another. Counsel for defendant
corporations stated at the examination: "That for the purpose of
any questions the government counsel see fit to ask, it may be
assumed that all the books, papers, and documents" described in the
subpoena "are present here in court, and we decline to submit them
to the inspection of the government counsel." The following then
took place:
"Q. state whether those books show the amounts, kinds, or grades
of paper manufactured by the defendant Northwest Paper Company and
sold by or through the defendant General Paper Company, as the
exclusive sales agent of the defendant Northwest Paper Company
since the eighth day of April, 1902, or since about the first of
May, 1902, if that is the date the business commenced."
"Same objections by defendants, and the witness given the same
advice."
"Q. You decline to answer?"
"A. I decline on advice of attorney."
"Q. Do the books also show where the said paper so manufactured
was sold and into what states and territories it was shipped since
the eighth day of April, 1902, or the first day of May, 1902?"
"Mr. Flanders: I wish to make the same objections, and I give
the witness the same advice."
"A. Same answer."
And counsel for the United States, not only as to the matters
expressed in the foregoing questions, but as to other matters which
the bill charged against the companies and which had been inquired
about, said that he desired to use the books and offer them in
evidence to show such matters. An inspection of the books was
refused, and all evidence of their contents withheld.
Necessarily the books contained the information. The paper
company was the selling agent of the Northwest Paper Company,
Page 201 U. S. 114
and must have kept an account of its sales and into what states
the paper of the company was shipped and sold. Such accounts are
material and relevant to complainant's case. They may or may not,
in connection with other evidence, sustain the charge of the United
States, but they are elements in the proof, having tendency enough
to sustain the charge to be considered material.
2. The claim of immateriality of the testimony cannot avail
plaintiffs against the orders of the circuit court. The procedure
before an examiner and his power are explained in
Blease v.
Garlington, 92 U. S. 1. It is
there said:
"The examiner, before whom the witnesses are orally examined, is
required to note exceptions, but he cannot decide upon their
validity. He must take down all the examination in writing, and
send it to the court, with the objections noted. So, too, when
depositions are taken according to the acts of Congress, or
otherwise, under the rules; exceptions to the testimony may be
noted by the officer taking the deposition, but he is not permitted
to decide upon them, and when the testimony, as reduced to writing
by the examiner, or the deposition, is filed in court, further
exceptions may be there taken. Thus, both the exceptions and the
testimony objected to are all before the court below, and come here
upon the appeal as part of the record and proceedings there."
And an application to a court to compel the delivery of
testimony in aid of the examination does not change the rule. The
testimony is taken to be submitted to the court where the suit is
pending, and all questions upon the evidence, its materiality and
sufficiency, are to be determined by it, and after it by an
appellate court. Even if the trial court permit the examination of
witnesses orally in open court upon the hearing in cases in equity,
as further said in
Blease v. Garlington, the testimony
must be taken
"down or its substance stated in writing and made part of the
record, or it will be entirely disregarded here on an appeal. So,
too, if testimony is objected to and ruled out, it must still be
sent here with the record, subject to the objection,
Page 201 U. S. 115
or the ruling will not be considered by us."
Blease v. Garlington has been applied at circuit in a
number of cases. [
Footnote
2]
3. These writs of error are not prosecuted by the parties in the
original suit, but by witnesses, to review a judgment of contempt
against them for disobeying orders to testify. Being witnesses
merely, it is not open to them to make objections to the testimony.
The tendency or effect of the testimony on the issues between the
parties is no concern of theirs. The basis of their privilege is
different from that, and entirely personal, as we shall presently
see.
II. That the documentary evidence called for was not shown to be
in the possession or under the control of the witnesses. This
contention is untenable. The ground of it is that the possession of
the witnesses was not personal, but was that of the respective
corporations of which they were officers. Granting this to be so,
and that the witnesses could have set up whatever privileges the
corporations had, nevertheless they had the custody (actual
possession) of the books, and were summoned from necessity, as
representing the corporations. It is hardly necessary to observe
that the witnesses had all the possession human beings could have
had or can have, and if the objection is to prevail, the books of a
corporation can be withdrawn from the reach of compulsory
process.
It is as useless as attempting to demonstrate that twice two
make four, to say that a corporation can have possession of nothing
except by the human beings who are its officers, and it is to them
-- not the intangible being they represent and act for --
Page 201 U. S. 116
that the law directs its process of subpoena and must procure
its evidence.
III. That the evidence, documentary and oral, required to be
produced was in the nature of incriminating evidence, which the
witnesses and the defendants are privileged from furnishing to the
plaintiff under the provisions of the federal Constitution and the
well recognized principles of equity procedure.
This contention asserts rights personal to the plaintiffs and
rights of the corporation defendants in the suit. The basis of both
rights is the protection of the Fourth and Fifth Amendments to the
Constitution of the United States.
The argument submitted is substantially the same as that made by
appellants in
Hale v. Henkel and
McAlister v.
Henkel. It is insisted that the immunity [
Footnote 3] given by the Act of February 25, 1903,
is not as broad as the penalties and forfeitures to which the
plaintiffs in error or the corporations of which they are officers
will be subjected. If the immunity, it is urged, protects from the
penalties of the Antitrust Act of 1890, it does not protect, nor
has Congress the power to protect, from the penalties of the
Minnesota laws, which make criminal a combination and conspiracy in
restraint of trade, and subject to forfeiture the charters of
corporations who become parties to such combination and conspiracy.
Sections 6955, 6956, 6962, Statutes of Minnesota, 1894.
The extent of the immunity and its application to corporations
was considered in
Hale v. Henkel and
McAlister v.
Henkel, and decided adversely to the contention of plaintiffs
in error.
Judgment affirmed.
[
Footnote 1]
"Now comes Benjamin F. Nelson and, answering the order to show
cause made in the above-entitled matter on the 15th day of
September, A.D. 1905, and the petition heretofore filed in said
matter by said complainant, upon which said order to show cause was
made, alleges and shows unto the court as follows:"
"That this respondent is a director and the president of
Hennepin Paper Company, one of the defendants in the above-entitled
matter, and is also the owner and holder of stock in said company
of the par value of forty-nine thousand ($49,000.00) dollars, and
that the books and papers referred to in said order to show cause
and in the petition and schedules thereto attached, upon which said
order to show cause was made, are the books and papers of said
Hennipen Paper Company, and not of this respondent, and are subject
to the control of said Hennepin Paper Company, and not of this
respondent; that this respondent is also a director of General
Paper Company, another of the defendants in the above-entitled
matter, and the owner and holder of stock in said General Paper
Company of the par value of $2,250; that said Hennepin Paper
Company and said General Paper Company have objected and do object,
and this respondent has objected and does object, to the production
of said books and papers for inspection by counsel for said
complainant for the purpose of being offered in evidence in said
cause. Said objections are based upon the following reasons:"
"1. That the materiality of said books and papers in the case
mentioned in said order to show cause now pending in said court has
not been established so as to authorize a court of equity of order
their inspection, production, and introduction in evidence, and
that the same are not material, relevant, or competent evidence in
said cause; that said books and papers contain matters of
importance relating to the business of said Hennepin Paper Company
and said General Paper Company in no way bearing upon or touching
the issues in said cause, which it would be highly injurious to the
business interests of both of said companies to make public, and
this respondent submits that he ought not to be required to
disclose any portions of said books or papers except on a proper
showing that the same are material to said cause to establish some
issue therein, and a showing that the same are not privileged for
the protection of the defendants above named."
"2. That one of the purposes of said complainant in instituting
said cause and in making the requests mentioned in said order to
show cause for the inspection, production, and introduction as
evidence of said books and papers is to establish and to compel
said Hennepin Paper Company and said General Paper Company, and
this respondent as such director or officer of each of said
defendants, to furnish to said complainant evidence tending to
establish that said Hennepin Paper Company and said General Paper
Company have been guilty of certain violations of the act of
Congress entitled 'An Act to Protect Trade and Commerce against
Unlawful Restraints and Monopolies,' approved July 2, 1890, and the
acts amendatory thereof or supplemental thereto, and to subject
said Hennepin Paper Company and said General Paper Company to the
penalties for such violations imposed by said act, and that to
compel the production by said Hennepin Paper Company or said
General Paper Company, through their officers or otherwise, of said
books and papers for inspection and introduction as evidence in
said cause, would be contrary to the provisions of the Fifth
Amendment to the Constitution of the United States, which provides
that no person shall be compelled in any criminal case to be a
witness against himself, and also contrary to the provisions of the
Fourth Amendment to the Constitution of the United States, which
provides that the right of the people to be secure in their
persons, houses, papers, and effects against unreasonable searches
and seizures shall not be violated."
"3. That the alleged acts of said Hennepin Paper Company
complained of by said complainant in its said original petition or
bill of complaint in said cause, and which said complainant is
endeavoring to establish in said cause, would, if committed by said
Hennepin Paper Company, be violations of the laws of the State of
Minnesota, and would subject said Hennepin Paper Company to
forfeiture of its charter and other penalties under said laws; that
to compel said Hennepin Paper Company, through this respondent as
one of its officers or otherwise, to produce said books and papers
for inspection and introduction as evidence in said cause would be
to compel it to furnish evidence tending to establish that it has
been guilty of such acts, and subject it to the forfeiture of its
charter and other penalties aforesaid, contrary to the provisions
hereinbefore mentioned of the Fourth and Fifth Amendments to the
Constitution of the United States."
"4. That in addition to the matters above set forth, the purpose
of the complainant in instituting said cause and in making the
requests mentioned in said order to show cause is to obtain from
said court a decree enjoining said General Paper Company from
carrying on the business for which it was incorporated, and to
enjoin the carrying out of, and operation under, certain agency
contracts and agreements existing between it and said Hennepin
Paper Company, on the alleged ground that said contracts and
agreements were made and are in violation of the provisions of said
act of Congress; that said contracts and agreements are of great
value not only to said General Paper Company, whose entire business
practically rests upon them, but are also of great value to, and
constitute valuable property rights in, each of the defendants
respectively parties thereto, including the said Hennepin Paper
Company, and that such injunction from carrying out said contracts
and agreements, and their virtual annulment thereby occasioned,
would result in great injury, damage, or loss not only to said
General Paper Company, but also to said Hennepin Paper Company and
to this respondent as a stockholder in each of said companies, and
that to compel the production by said Hennepin Paper Company or
said General Paper Company, or either of them, though this
respondent as such director or officer or otherwise, of said books
and papers for inspection and introduction as evidence in said
cause for the purpose aforesaid would be contrary not only to the
provisions of said Fourth and Fifth Amendments to the Constitution
of the United States, but also contrary to the well established
rule of the common law, as well as of equity jurisprudence, that no
person will be compelled to discover any fact, either by producing
documents or answering questions, which may subject him, either
directly or eventually, to prosecution for a crime, or to a
forfeiture or penalty, or anything in the nature of a forfeiture or
penalty."
"Further answering, this respondent alleges and shows unto this
court that all the matters concerning which the questions referred
to in said petition and schedules thereto annexed were asked, and
which this respondent refused to answer, as stated in said
petition, came to this respondent's knowledge exclusively as
president and a director of said Hennepin Paper Company, or as a
director of said General Paper Company, in the conduct of matters
entrusted to him as such director or president, and which said
companies, from the nature of the case, were compelled to entrust
to this respondent as such director or officer, and that said
Hennepin Paper Company and said General Paper Company have objected
and do object, and this respondent has objected and does object, to
said questions and to his being required to answer the same for
reasons similar to those already set forth in respect to the
production inspection, and introduction in evidence of the books
and papers above mentioned, that is to say:"
"1. That the materiality of said questions in the cause above
mentioned has not been established so as to authorize a court of
equity to order them to be answered, and that the same are not
material, relevant, or competent evidence in said cause."
"2. That the purpose of said complainant in instituting said
cause and in asking said questions is to establish and to compel
said Hennepin Paper Company and said General Paper Company, through
this respondent as such director or officer, to furnish to said
complainant evidence tending to establish that said Hennepin Paper
Company and said General Paper Company have been guilty of certain
violations of the acts of Congress above referred to, and to
subject them to the penalties for such violations imposed by said
acts, and that to compel said defendants hereinbefore named, or
either of them, through this respondent, to answer said questions,
would be contrary to the provisions hereinbefore referred to of
said Fourth and Fifth Amendments to the Constitution of the United
States."
"3. That the alleged acts of said Hennepin Paper Company
complained of by said complainant in its original petition or bill
or complaint in said cause, and which said complainant is
endeavoring to establish in said cause, would, if committed by it,
be violations of the laws of the State of Minnesota, and would
subject it to forfeiture of its charter and other penalties under
said laws; that to compel it through this respondent to answer the
questions aforesaid would be to compel it to furnish evidence
tending to establish that it has been guilty of such acts, and
subject it to the forfeiture of its charter and other penalties
aforesaid, contrary to the provisions hereinbefore referred to of
said Fourth and Fifth Amendments to the Constitution of the United
States."
"4. That, in addition to the matters above set forth, the
purpose of the complainant in instituting said cause and in asking
the questions mentioned in said order to show cause, is to obtain a
decree enjoining said General Paper Company from carrying on the
business for which it was incorporated and to enjoin the carrying
out of and operation under certain agency contracts and agreements
existing between it and said Hennepin Paper Company on the alleged
ground that said contracts and agreements were made and are in
violation of the provisions of said acts of Congress; that said
contracts and agreements are of great value, not only to said
General Paper Company, whose entire business practically rests upon
them, but are also of great value to, and constitute valuable
property rights in, each of the defendants respectively parties
thereto, including The Hennepin Paper Company, and that such
injunction from carrying out said contracts and agreements, and
their virtual annulment thereby occasioned, would result in great
injury, damage, and loss, not only to said Hennepin Paper Company
or said General Paper Company, and that to compel said Hennepin
Paper Company or said General Paper Company, through this
respondent, to answer the questions aforesaid in aid of the
purposes aforesaid would be contrary not only to the provisions
hereinbefore referred to of said Fourth and Fifth Amendments to the
Constitution of the United States, but also contrary to the well
established rule of the common law, as well as of equity
jurisprudence, that no person will be compelled to discover any
fact, either by producing documents or answering questions, which
may subject him, either directly or indirectly, to prosecution for
a crime or to a forfeiture or penalty, or anything in the nature of
a forfeiture or penalty."
"Further answering, this respondent alleges that he ought not to
be required to answer the questions or comply with the requests, or
produce for inspection by counsel for the complainant, or for the
purpose of being offered in evidence in the cause above referred
to, the books and papers referred to in said order to show cause
and in the petition and schedules thereto annexed, upon which said
order to show cause was made, not only for the reasons hereinabove
set forth, but also for the following reasons, that is to say:"
"1. That one of the purpose of said complainant in instituting
said cause and in seeking to require this respondent to answer the
questions and comply with the requests and produce for inspection
by counsel for the complainant, and for the purpose of being
offered in evidence in said cause, the books and papers aforesaid,
is to establish and to compel this respondent to furnish to said
complainant evidence tending to establish that he has been guilty
of certain violations of the acts of Congress hereinbefore
mentioned and referred to, and to subject him to the penalties for
such violations imposed by said acts, and that to compel him to
answer said questions or comply with said requests, or to produce
for inspection or for the purpose of being offered in evidence in
said cause, the said books and papers, would be contrary to the
provisions hereinbefore referred to of said Fourth and Fifth
Amendments to the Constitution of the United States."
"2. That the alleged acts of said Hennepin Paper Company and of
said General Paper Company complained of by the complainant in its
said original petition or bill of complaint in said cause, and
which said complainant is endeavoring to establish in said cause,
would, if committed by said defendant companies, involve certain
violations of the laws of the State of Minnesota by this
respondent, and would subject him to penalties and forfeiture under
said laws, and that to compel him to answer the questions or comply
with the requirements aforesaid, or to produce for inspection, or
for the purpose of being offered in evidence in said cause, the
said books and papers, would be to compel him to furnish evidence
tending to establish that he has been guilty of such violations of
the laws of the State of Minnesota, and to subject him to the
penalties and forfeitures aforesaid, contrary to the provisions
hereinbefore referred to of said Fourth and Fifth Amendments to the
Constitution of the United States."
"That one of the purposes of said complainant in instituting
said cause and in seeking to require this respondent to answer the
questions and comply with the requests, and produce for inspection
by counsel for the complainant and for the purpose of being offered
in evidence in said cause, the books and papers above referred to,
is to establish and compel this respondent to furnish to said
complainant evidence tending to establish the allegations of the
original petition or bill of complaint in said cause, which, if
established, will result in subjecting this respondent to loss or
detriment in the nature of a penalty or forfeiture, in that the
said Hennepin Paper Company, of which this respondent is a
stockholder as aforesaid, will be subjected, under the laws of the
State of Minnesota, to the forfeiture of its charter, resulting in
the virtual forfeiture of the stock of this respondent in said
defendant company and in the loss and forfeiture to a large extent
of the value of the interest of this respondent in said
corporation, and in that the contracts made through said General
Paper Company as its sales agent by said Hennepin Paper Company
under and pursuant to the agency contracts herein referred to
between said Hennepin Paper Company and said General Paper Company
will be virtually annulled, and the property rights of said
Hennepin Paper Company in said contracts destroyed; that there are
a large number of such contracts outstanding under which large sums
of money are due to said Hennepin Paper Company, all of which, as
this respondent is advised and believes, will be or may be
forfeited and lost to said defendant and to this respondent as a
stockholder therein in case the illegal combination alleged in said
original petition or bill of complaint is established by the decree
or judgment in said cause, and this respondent alleges that to
compel him to answer the questions and comply with the requests and
product for inspection and for purpose of being offered in evidence
the books and papers referred to in said order to show cause and
the petition and schedules aforesaid, and which he has declined to
answer and comply with or produce, if material to said cause, would
be contrary to the provisions of said Fourth and Fifth Amendments
to the Constitution of the United States, and also contrary to the
well established rule of the common law and of equity jurisprudence
that no person will be compelled to discover any fact or matter
which may subject him to forfeiture or penalty or anything in the
nature of a forfeiture or penalty."
[
Footnote 2]
Thomson-Houston Electric Co. v. Jeffrey Mfg. Co., 83 F.
614;
Maxim-Nordenfelt Guns & Ammunition Co. v. Colt's
Patent Firearms Mfg. Co., 103 F. 39;
Parisian Comb Co. v.
Eschwege, 92 F. 721;
Fayerweather v. Ritch, 89 F.
529;
Appleton v. Ecaubert, 45 F. 281;
Edison Electric
Light Co. v. United States Electric Lighting Co., 45 F. 55,
59;
Johnson Steel Street-Rail Co. v. North Branch Steel
Co., 48 Fed.196;
Adee v. J. L. Mott Iron Works, 46 F.
39;
Lloyd v. Pennie, 50 F. 4;
Brown v. Worster,
113 F. 20;
MacWilliam v. Connecticut Web Co., 119 F. 509;
Whitehead & Hoag Co. v. O'Callahan, 130 F. 243.
[
Footnote 3]
"Provided, that no person shall be prosecuted or be subjected to
any penalty or forfeiture for or on account of any transaction,
matter, or thing concerning which he may testify or produce
evidence, documentary or otherwise. in any proceeding, suit, or
prosecution under said acts: Provided further, that no person so
testifying shall be exempt from prosecution or punishment for
perjury committed in so testifying."
Act February, 25, 1903.
