LIGGETT 'V. GLENN.
881
LIGGETT
v.
GLENN.
GLENN 11. LIGGETT. Court of Appeats, Eighth CWeUU. .Tune 18, 1892.)
Nos. 61,611. L STATE AND PBDlIRAL COURTS . IDENTITY. CONCURRENT JURISDICTION-PRIORITY OF SUIT-
A suit in a federal coutt by a stockholder in behalf of himself and other stockholders against a corporation and its officers and directors, seeking by injunction to correct abuses of administration, alleging insolvency, and asking the appointment of a receiver to wind up the business and pay the debts of the corporation, is 'not identical, as to interests of parties, with a subsequent suit in a state court by a judgment creditor in behalf of himself and other creditors to ascertain the validity of a deed of assignment from the corporation to certain trustees, and asking the appointment of a re(',eiver, with power to collect all assessments that may be made on the capital stock, and otherwise care for and collect the assets and credits of the corporation j and the pendency of the former SUit, and the appointment of a receiver thill.·ein, does not deprive the state court of jurisdiction to entertain the latter. .
8.
SAME..,..RECEIVERS.
In such case the general rule that, in cases of concurrent jurisdiction, the jurisdiction of the court first taking control of the property is exclusive, does not apply, it appearing that the receiver appointed by the federal court never had actual possession of the corporation's property, excepting an insignificant portion, Which was sold, and the proceeds applied to the expenses of the receivership, that no assessments were ordered by that court, and that the receiver was discharged and the case. dismissed before any steps were taken in the state court for the acquisition or distribution of any property.
,CORPORATIONS-AsSESSMENT ON STOCK.
In the decree of .the federal court appointing the receiver, a clause providing that, "if there shall be any sums due upon the shares of the capital stock of saili .companY,··the receiver will proceed to colleot and reoover the same," cannot be construed as a call fol" a balance of 80 per cent. of the subscription, not yet called for, but merely as giving-authority to collect any sums not paid on calls already m a d e . . In an:action to l"ecoverassessments on the stock of a corporation, the stock books of tb:ecompany ate competent evidence to show that defendant is a stockholder, When conneoted w.ith other evidence showing that a name contained therein, which is identical with defendant's name, was entered as his name. . ' · AND CLIENT.
.. SAME-STOCKIIOLDERS-E)VIDENCE-STOCK BOOK.
5.
Defendant and other persons signed a written contract with an attorney to pay him certaln fees for defending all suits brought against them to recover assessments on the stock of a corporation, the expense. to be borne "by us pro rata on the of stock subscribed by us as set opposite our names." This contract was subsequently filed by the ljottorney in a probate court as a voucher for a claim for fees the estate of one of the signers. From there it was obtained by another attorney, and, in a suit against another signer, was offered as evidence that the latter was a stOCkholder. Held, that the document fell within the rule protecting confidential communications between attorney and client, and was inadmissible. 47 Fed. Rep. 472,reversed. SAME.
6.
'I.
The admissibility of a paper containing communications between client and attorney is not dependent upon the manner in which possession thereof was ohtained from the attorney, but upon the inherent character of the communication itself. If the communication is privileged, it can only be deprived of that character by some unequivocal act on the part of the client himself. SAMB-STATE LAWS INAPPLICABLE.
In actions in the federal courts, the question whether a communication between client and attorney is admissible in evidence is not dependent upon the statutes of the state in which the court sits. Insurance 00. v. Schaefer, 94 U. S. 457, fol-
loWed;- .
882
I'EDBiAti !JiEPOR'TER,
voL 51.
L Al'PEAL-HABMLlIBB ERROR. Whether the produotion of,'.lIto,ok book 1:Ie"riqg a name Identloat wltb ot · penon sued for an assessment'ls Bulncientto' oteate a presumptidll that such per80n Is a stockholder is a question which may be dependent olD circumstances, and where iD(lOmpetent evidenoe, tllereof" was admitted, and the re(',ord fall8 to show that suffiolent other evidenod W&S Introduced 'to' render neoessary the conclusion that the parties were identical, the court cannot say that the admission of the 11) .. and must therllfore .. .....MB-RECORD-rRESUMPTJONS. In a suit to recover an assessment on the stook of a oorporation, the court allowed interest thereon only from the dati$ of ·theliblt. On appeal the record did not contain the charter and by-laws of the corporation, and did not purport to contain all "the . aeld. thatWlllle,1n"the absenoe of pJ:llvisions, Interest wQuld run from the date ot the call, the court oould not Ray but that the oharter and laws. were the,trialOQurt" and contained m"tt.oJ:W. justify Its decMon, and mU8t therefore a1llrm the .
InErroJ' :te>'thQ Circuit COurt of the United States for the El1$tem District of MisSonri. Action,oy, .John Glenp.,trl1steeof thir National.Express& Transportation Company, against Joh Il E.Liggett, to recover an assessment on the stock'of said 'con;.pany,.. ' Judgment for plaintitr,allowing interest from the commencement of the suit. 47 Fed. Rep. 472. Both parties bring error, (lnly. o(the allowance of interest, as insuf· ficient. Reversed on exceptions. .For op'inions in prioreuits to recover assessments, see 23 Fed. Rep. 695" and 24, Fed. Rep. SM. . '.. . Statemen.t by: $HIRAS, District Judge: On the 12th lJf December, 1865, tht' general assembly of the state of Virginia adopted an act entitled "An act to amend and re-enact an act to hicorporatethe Company, passed Maroh 22,J861, and Wiricol'po'rate & Transportation Company; tt it. being 'thlili'eln provided tBat thecoDlpany known by the latter name should be a corporation with authority to engage in the express and trlll'1sportation business,witb an authorizQdcapital stock of$5,000,000, divided intO shares of tlOO each. The company organized under the provisions of the&Qt, its capital stock were made by many persons different states. On the 8th day of August, 1866; Josiah ,'Reynolds,astoekholderin thecorpomtion, filed a bill in equity in the cir<:luit court of the United States for eastern district of behalf of himself and.Jl other stockholders of the compaqy, that the provisions of tb,'e.charter of the corporation had not been observed by.theofficers of the company; that its assets had been wasted and the .company was insolvent and unable to further carryon the business for which it was created; and for tpese reaspns an injunction and of a receiver wssasked, to the end, thi.tttheaft8.irs of the corpOlitiQrimight be settled and the combe .· ' 1866,'aninjunction was granted, restraining the, QOwpany, its :directors and from using the property of the company for any othe.rpurpose than carrying on the regular and and business for the companywafl organim:t '. On the 18th of September, 1866, the board of directors of thecorporation authorized and directed the execution of a general deed of assignH
LIGGETT V. GLENN.
383
mentl?'the property ofthecbmpany to trustees for the benefit of creditors; and on the 20th of September, 1866, the president of the company executed; a general deed:of assignment to,JohnB. Hoge, JohnJ. KoIly, and O. u!iver:O'Dollnell,as trustees, in accordance with the aotionof the board ()f directors previously had. On the3Ist of December, 1866, the UniiedSmtes circuit an order appointing Westel Willoughbya "rep'eiver of the said'National Express '& Transportation COll).pany, and, of property, and effects of'the said National Express & Transp()rtati()n Company, with all the powers, rights, and obligations USUJI,l, in such cases; subject to the control of court, until affairil of c,ompany be fully and finally closed up." On the 4th of Deceinber, .1871, there was filed in the court of the city Va., bY' W. W. Glenn, acreditoroCsaid express in his own behalf and in that of .such other credparties, a bill in equity against sai9. corporation, itors as <:iharged that said company was insolvent; that it was heavily indeb(ed" to various parties, induding said W. W. Glenn; that 20 per oent", of the capital ,stock had been called in,hut only asmali part ther,eof),iad been pai4jthilt the remaining portion of the capital stock was sU,bject to· assessment and collection for the payment of the debts of the corporation; that it was doubtful whether the trustees named in the general cI,eed of .assignment had, the legal right to collect the portion of the capital stock not previously called fOf by the tion itself;thlit ihevalidity of the deed of assignment was questioned of the creditors were in danger, and that and in dispute; ,that the for their protection the question of the validity of the assignment should be set at rest; that the trustees should be required to render an account; that a receiver trustee, should be appointed, with full power to cQIlect all assessmerits that might be made upon the capital stock, and otherwise care for and collect the assets and credits of snid company. On the 4th of August, 1879, an illflended and supplemental bill was filed in said cause by the administrator of W. W. Glenn, ,:nd on the 14th. of December, 1880, after due service upon the corporatIOn and the trustees named in the (leed ofassigliment, the court entered a decree holding the deed of assignment, to 'be valid, relieving the said trustees from further duty or responsibility, appohlting John Glenn trustee in their place, and making an ,assessment upon the capital stock of 30 per cent., and authorizing ,and directing the said John Glenn, as trustee, to collect such assessment and to sue for ,the Sij,me in all jurisdictions. On the 10tll ofDecember, 188Q, four days before the entry of the decree by the city court ofRichmond , the receiver appointed by the United States circuit court in December, 1866, filed a brief report in that court, in which hesmted that none of the creditors had submitted their claims to him; that .no l,\.ction had been asked at his by anyone for at least 10 years pastjthat he had only collected about$l,OOO, all of which had peen expended in endeavoring to procure the books and papers of the company, in which efforts he had been unsuccessful. On the filing of this report by the receiver, and on, the same day , the said circuit
or
384
FEDERAL REPORTER,
vol. 51.
court of theO'nited:Sbites in the case' of Reynolrk v; National ExpressJc Transp. Co., entered the following order: i'Upon the report of receiver W. Willoughby being filed, on motion of tbe defendants, John Blair Roge anll J.J. Kelly, by John Howard, their counsel, it is adjudged, ordered, and decreed the order of the 31st of December, 1,866, DIed on the 22d day of January, 1867, appointing a receiver in thi!! case, be,and the same is hereby, vacated, annulled, and set aside, and said receiver, W. Willoughby, be discharged and exonerated, the injunction heretofore granted in thili cause be dissolved; and this suit be disinissed." pn the 27th of June, 1884, by an order duly made by the chancery court of the city of Richmond, Va:, the cause pending before it was removed to the circuit court of Henrico county, Va., to be there proceeded law; and on the 26th of March, 1886, a decree was entered in said caUse by the last-Illentioned court, making a further asseSSmeht and call for 50 per cent. of the capital stock of said corporation, arid the trustee to enforce the collection thereof. In 1884, Gleim, trustee under the a.ppointment made by the chancery court of the city of Richmond, brought suit against John Liggett in the United States circuit court for the eastern district of Missouri, to collect from him the 30 per cent. assessment upon 63 shares of stock in said corporation, and on the 15th of July, 1885, the plaintiff Glenn suffered a . nonsuit in that action. Ontbe.12th of July, 1885, the said Gleno, trustee, brought the present action in the United States circuit court for the eastern district of Missouri against John Liggett; and on the 14th of December, 1886, .an amended petition in. said action, wherein it is averred that said iQ the year 1866, acquired by assignment 63 shares of the capitalstoc]r of the National Express & Transportation Company, and as the ()wner thereof became bound to pay the 30 and 50 per cent. assessmade upon said capital stock by the chancery court of the city of Richmond aQ<l the circuit court of Henrico county, Va. To this petition the said Liggett answered, denying the several allegations of the petition, and further pleading that the chancery court of the city of Richmond never had or acquired any jurisdiction of the subject-matter or of the partiesdefeudant in thecause of W. W. Glenn v. National Exp. Jc Trangp. 00.,' by reason of the pendency in the circuit court of the United States for the eastern district of Virginia (>f the cause of Reynolrk v. Said Express Co., and the proceedings had therein; that. more than 10 years having elapsed since the entry of the decree or order in said cause, this action is barred by the provisions of the statutes of Missouri. The case was tried before the court, a jury being waived, and, judgment being in favor of the plaintiff, the defendant, Liggett, brings the case before this court, assigning error in several pa.rticulars, but which can be all considered under four general Mason G. Smith and John A. Harrison, for plaintiff in error, Liggett. The decrees of the state court of Virginia are void, because said courts were without jurisdiction to pass them. Wiswall v. Sampson, 14 How. 52; Peale v. Phipps, Id. 368-374; Vaughan v. Northup, 15 Pet. I; Gaylord v. Railroad, 6 Biss. 286; Barton v. Bar-
filed
385
bour. 104 U. S. 126; Heidritt61' v. Oilcloth 00., 112 U. S. 294-302, 5 Sup. Ct. Rep. 135. The federal court for the district of Virginia had jurisdiction and lawful authority to render the decree in the suit of Reynolds v. National Exp. &: of date December 31. 1866. and that decree is not open to collateral attack in this ca use. 2 Wat. Corp. par. a56; Stevens v. Davison, 18 Grat. 828; Thompson v. Greeley, (Mo. Sup.) 17 S. W. Rep. 962; Buck v. Insurance 00.,4 Fed. Rep. 849; In reSuburban Hotel 00·· L. R. 2 Ch. App. 737. per Lord CAIRNS.loc. clt. 750; Mor. Priv. Corp. (2d Ed,) §§ 284. 285; Beach. Rec. § 404; Lawrence v. Insw'ance 00·· 1 Paige, 587; Freem. Judgm. § 124; High, Rec, 203; Greeley v. Bank, 103 Mo. 212. 15 S. W. Rep. 429; Ames v. Trustees. 20 .Beav. 353: Vermont, etc., R. 00. v. Ve1'mont 061lt. R. 00.,46 Vt, 795, and cases there cited; Russell v. Railway 00., 3 Macn. & G. 104; Beve1'ley v. B1'ooke. 4 Grat. 187; Jay v. De Groot, 17 Abb. Pro 36. note: Barbour v. Ba1lk. 45 Ohio St. 133, 12 N, E. Rep. 5: Neall v, Hill, 16 Cal. 146; Murray V. Vanderbilt, 89 Barb. 147; Mining 00. v. Edwards, 103 Ill. 475; Cook, Stocks, § 648; Dodge v. Woolsey, 18 How. 341. Actual seizure of the assets of the express company by the receiver in the federal COUl't was unnecessary. The filing of the bill and prayerfor a receiver gave that court exclusive jurisdiction to control the res, the assets; but, even were this not so, the entry of the decree of December 31, 1866, placed all the assets, tangible and intangible, in custodia legis. and under the exclusive controlof the federal court, and could not be proceeded against by any other court. Pennoyer v. Neff, 95 U. S. 727; Oooper v. Reynolds, 10 Wall. 317; Ames v. Trustees, 20 Beav. 332. The jurisdiction of the federal court was complete and exclusive as to parties and subject-matter. The trustees undettbe assignment were brought in and made parties, and these trustees represented the creditors. Oorcoran v. Oanal 00.· 94 U. S. 741-745: Kerri,Yon v. Stewart, 93 U. S. 155. But it was not necessary to bring in the trustees. They were not purchasers for value, and were bound by the lis pendens. 1 Story. Eq. Jur. §§ 405. 406: Tilton v. Oofield. 93 U. S. 168. The jurisdiction of any conrt exercising authority over a subject may be inquired into in every other court where the proceedings of the former are relied on, and brought before the latter by the party the benefit of such proceedings. Elliott v. PeiTsol, 1 Pet. 328: Hickey V.' Stewart, 3 How. 750; Ohristmas v. Russell, 5 Wall. 290. ·Jurisdiction once vested is not ousted by subsequent events: but "the jurisdiction of a court depends upon the state of things at the time action is brought." Mollan V. T01'1'ance, 9 Wheat. 537. MARSHALL, C. J.; Morgan's Hei1's v. Morgan, 2 Wheat. 290: Oulver v. Woodru.U' 00., 5 Dill. 392. When suit is instituted in a court without jurisdiction of the subject-mat. ter, and the court is afterwards invested with jurisdiction. this subsequent investurI' does not cure the prior defect, since without jurisdiction all acts are absolutely void. Wells, Jur. p. 12, § 18. The decree of the federal court, whereby a receiver was appointed of the funds, property, and effects of the express company, and vested with title to all property of said company, for the use and benefit of the creditors (If the company, and whereby the business of the company was decreed to be wound up by and through the receiver, who had entered upon his administration, de, prived the company of all faculty to represent the stockholders as their agent in another court. in reference to the same property and assets so in the possession of the receiver. and as to which he so had title and exclusive control. The receiver, and not the company, had such representative faculty as to stockholders and their liability. and this was necessarily exclusive. V.51F.no.7-25
381;:
FEDERAL
v(!)L 51.
,:1EaJprts6. Oo.v/'RailroadCJO.·, 99 iJ.91,...199; Railroad Co.,' Id',72; Davis v'. (h'ay, 16 Wall. 203; Beach, Rec. 663, 668, 678,711; Kir'kpatr'ick 'v. McElroYi41N. Eq. 539. 7 Atl. Rep. 647 .osgood v. 524. ' . , ;,' "A oause pfaction accrued to the.receiver' of the federal court by vil'tue of the decree of December 31, 1866, to recover the entire balances due on the stockof,itbel!ltockholders'oftbe express' company. and 19 years having1ielapsedsince said,decooewasentered before the commencement of this act'io:n;this action bBrred by the statut,es. ,of limitation of Missouri. -,·«/.,8; 29,: Van.BUTel1'V. Chenango (}iJunty ,Hut.· .Ins. Co., 12, Barb..,671;'. Rmtz.v· Hawley" ,i'Barb. Ch. 122. Y..I836, c,. 8,art.3,;§69, p.:469, (see the language of the decree and statute. ,) , , I The"statute of MissourHs'8s filll()[Ws: "Sec. 6775. What within jive years. Witbin five yearS-First, aU actionsi.lpon oontracts, obHgations, or liabilities, expreils:M- implied, except those mentioned in sectlon6774, and except upon jUdgnienta or decrees of"a court ofrecatd.andexcept \Vherea different time is h!'rein limited." etc. ' The receiver' federal court lIaving been appointed for the same purposes;:in effect, as wasplaintiif, :Gienn, and the i.n'the federal court case being SUbstantially decree in the state court. and efficient for the'sa-rrie. end, it follows that whatever would have barred a recovery agallistBstuckholder in aD action by such federal court receiver will bar plllintiifi:I1 this ,;'A.sohling,that the decree of the federal court was tantamouut to a call and assessment on all the stock, and gave the receiver, acting for the creditors of at cause·of action, immediately enforceable by:sUit against the stoekh'()lders; so as Loset in motion the statute of limitations in favor of such stoekl1olderiJ and againshnoh receiver, the question arises as to Whether those facts, if sufficient to l!iet:tbeBtatutein motion against the receiver. will bar tllepllUfltiif in this ease. ' ·The ,plllintiff. Glenn" is bound: by the, decree of the federal court. This results from the fact that he took and holds under the trustees in the aSSignment. Tlllit'deed wasexecutpij by the company pending tbe sldt,'and(conllElquently'underthe of lis pendens the grantees in such deed and' the!\' assigns Were bound by the decree just as the corporation, the '. (b) Nor grantee.s in the deed of assignment for value. "(c) Tl1fJ'decree of date December 31; lS66, was for the benefit of the creditors,.t/ndothetsinterestedi ill the property of the 'corporation. The receiver repreaentedaU and htlld,' for'the bentlllt of all. The proceeding was for the benefit oftbe sau'iepersQns (and the receiV'er held for them) as was the assignmpot, and; ;tbe beneficiaries being the same, it follows that they are bOllnd by,the statute wldell'the decreliBet in motion·· The'books' ot acorpbration ( as distinguished from books con tain ing entries of corporate acts, meetinlits, etc.) cannot be lIsed against. a stranger to connect hiril'wlthltbe ;cofpol'ation ,as a. stockholder. Ev. § 493; & A. Co?,§,679, ,TayI. Ev. § Bamv. Rallr.oad Co., 3 H. L. Cas. 22, Ma1'riag6 v; liiawrence;3Barn. & Ald. 142; Railroad 'Go. v. Hickman, 28 Pa. St.. 918.;.328o;: Vom.'T.Woelper, 3 Serg. & R. 29; Chase v. Rail1'oad Co., 38' Ill. 210,; Manufaeturi1tgCo. v. Vandyke, 9 N. J. Eg. 49l:l; Co. v. EaBtmu:n,84 N. H; v. Brown, 36 N. H. 545-568: /Jackson v. Walsh,3Jiohns.226; Fo:iJ'sCase, 3 De G6X ·· & 8.,465: Railroad 00. v. B1'own1;igg,.4 Exch. 425; 1 Saund. PI.&Ev. 850; Hager v. Oleveland, 36 Md. 476-494: Jonelv. Trustees, etc., 46 ,Ala. 626; ¥.udgett v. H01Tell, 33 Cal. 25.
tIGqETT V. GLENN.
TheagrE',emenb for fees, being a communication betWllel),an attorney and a client, was. after its delivery to Bogy, EWing, and Holliday, a privileged communication. State v. Dawson, 90 Mo. 149, 1 S. W. Rep. 827, and cases cited; Oross v. Riggf,n,y, 50 Mo. 335; JokrtSon' v. Su,Uivan, 23 Mo. 474; Hull iV. Lyon, 27 Mo. 570; 1 Phil. Ev. (4th Amer. Ed.) p. 147; 1 Greenl. Ev. § 240.. The entries inthe books, of the express company were not, so proved Qr authenticated as to become evidence against the plaintiff in error.
T. K. Sl.inker, for defendant in error, Glenn. The receivership in the Reynolds Oase is no defense to this action: (1) Because the decree of, the Richmond chancery court is as against stockholders that it was properly rendered. , Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. Rep. 739; Glenn v. Liggett. 135 U. S. 533, 10 Sup. Ct. Rep. 867; Grahnm v. RaUl'oar;], 00., 118 U.S.174179,6 Sup. Ct. Rep. 1009; Hamilton v. Glenn, 85 Va. 901.9 S. E. Rep. 129; Lehman v. Glenn, 87 Ala. 618,6 South. Rep. 44. (2) Because the chancery courl diu not interfere or undertake to interfere with the possession of the receiver. High, Hec. § 50: Buck v. Colbath, 3 Wall. 335, 345; Bank v. Masonic Hall, 63 Ga. 549; Heidrittel' v. Oil-Oloth 00., 112 U. S. 304, 305,5 Sup. Ct. Rep. 135; Yonley v. Lavender, ,21 Wall. 278; Heath v. Railway 00., 8a Mo. 617; The Holladay Oase, 27 Fed. Rep. 830; Ooal Co. v. McCreery, 141 U S. 475, 1213up. Ct. Rep. 28. That it did not so interfere is plain, because: , First;, The Revnolds decree did nut authorize the receiver to collect the un· called Iiabilit)', but only what had been called, but not paid. Scovill v. Thayer, lu5 U. S. 155: Hawkin,y v. 131 U. S. 319,9 Sup. Ct. Rep. 739; Glenn v. Liggett, 135 U. S. 533, 10 Sup. Ot. Hep. 867; Shauyh· nessy v.Insurance Co., 21 Barb. 605,609; ])erJend011' v. 23 Barb. . 665. Second. At3!1Y rate, the Reynolds decree was inoperative so far as the Missouri stockholders were concerned. Booth v. Olq,rk, 17 How. 322; Insurance 00. v. Needles, 52 Mo. 17; Brigham v. Luddin,gton, 12 J3latchf, 207; Atkins v. Railway 00., 29 Fed. Hep.173: Askew v. Bank, 83 Mo. 366; Graydon v. Church. 7 Mich. 36: Ourtis v. Smith, 6 Blatchf. 549, 551; Oatlin v. Silaer Plate 00.,123 Ind. 477, 24:N. E. Rep. 250. Third. Again, ,the receiver was never in possession, having for 14 years omitted to exercise any powers. Bank v. Beaston, 7 Gill & J. 421; Bank v. Richards, 3 Hun, 366; High. Rec. § 137; Redjlel(l v. Iron 00., 110 U. S. 174, 3 Sup. Ct. Hep. 570. Fourth. Thefpderal court purposely surrendered its jurisdiction. Gaylord v. Railroad Co., 6 Biss. 286, cited in High, Rec. (2d Ed.) § 50, Fifth. Dismis.sal.of the Heynolds suit left matters in same position as if the suit had never been instituted. ])owling v. Polack, 18 Cal. 6::16; 2 Blaek, Judgm. §§ 720, 723; Rosse v. Rust, 4 Johns..Ch. 300; v. Ruckman, 51 N. Y. 392; Jones v. Howard,a Allen, 223; Clapp v. 5 AJlpn, 159; Potter's Dwar. St. (Ed. 1871,) p. 160; Montgomery v.Merrill, 18 Mich. 338; High. 135; BerJerley v. Brooke, 4 Grat. 212; Sharp v. Oarter, 3P. Wms. 375; Glenn v. Gill, 2 Md. 1. The Richmond chancery cOllrt and the Henrico circuit court were by stat-, ute vested with general equitable jurisdiction. Laws Va. 1874, pp. 224, 225. Code Va. 1873, p. 1103, c. 170, § 2.
388
Statute or:1imltations did not beKinto run in favor of stockholders from date-6f decree, December 31, 1866, because: (1) As already shown, that decree was not a call. Glenn v. Macon, 32 Fed; Ri.op. 7. (2) Ifa call, it was not binding on this plaintiff, who is not a successor to the receiver. . 'l'hisQction is not barred by lapse of time since December 14, 1880. , Rev. St. Mo. 1889" § 6784; Shaw v. Pershing, 57 Mo. 416; Briant v. Fudge, 63 Mo. 489; State v. O'Gorman, 75 Mo. 370; Ohouteau v. Rowse, 90 Mo. 195,2 S. W. Rep. 209., The court properly permitted the fee contract to be read in evidence, because: '(I) The paper itself is not of a confidential character. 1 Greenl. Ev. §§ 236-239; Rig{}s v. lJe1miston, 3 Johns. Cas. 198; Stoney v. McNeill, Harp. Law, 157; Hatton v. Robinson, 14 Pick. 416; House v. House,61 Mich. 69,27 N. W. Rep. 858; Earle v. G1'oUt, 46 Vt.113; In 1'e McOarthy'sWill; (Sup.) 8 N. Y. 8upp. 578. (2) It was not produced by any person standing in a confidential relation ' to defendant. 1 Whart. Ev. (3d Ed.) 586; 1 Phil. Ev. side pages 147, 148; Rhoades v. Selin, 4Wash.C.C. 718, 719: Brandtv.Klein, 17 Johns. 335; Jackson v. McVey, 18 Johns. '330; Ooveney v. Tanp;ahill, 1 Hill, (N. Y.) 33; McPherson v. Rathbone,7 Wentl.216: Brown v. Payson, 6 N. H. 443; Eicke v. Nokes, 1 30!; Bevan v. Waters, Id. 235; Wilson v. RastalZ, 4 TermR. 759; 1 Greenl. Ev. § 241; Snow v. Gould, 74 Me. 540; Mitchell v. Bromberger, 2 Nev. 345; Bank v. Suyl1am, , 5 How. Pro 254. (3) Communications, oral and written alike, are privileged only in the sense that the attorney to whom they are iliatle canllot reveal them. -Coveney v.Tannahill, 1 Hill, (N.Y.) 33; Ohirac V. :(:leinicke1', 11 Wheat. 294; Ohase, a Wis; 456; Wilson v.' RastaU, 4 Term' R. 753; J ackson v. French. a'Wend. 337; Hoy V.MON'is, 13 Gray. 519; Guddard v.Gard" ner,28 Conn. 172; Insurance 00. v. Reynold.Y, 36 Mich. 502; Andrews v. Solomon, Pet. C. 0.356; Holman-v; Kimball, 22 Vt. 555; Fountain v. Young, 6-Esp.113; Barnes V. Harris, 7 Cush. 576; 1 Green!. Ev: § 239; lJoev.Jaundey, 8 Car. & P. -99;Sumple V. Frost, 10 Iowa, 266; Hawes v. State, 88 Ala. 37,7 South, Rep, 302; Lloyd v. Mostyn, 10 Mees.& W. 481. Holliday WllS l\competentwitness to prove the fee contract. Johnson v.Daveme, 19 Johns. 134;' B1'own v. Jewett. 120 Mass. 215; Hurd v. MOl'ing, 1 Car. & P. 372; Rev. St. Mo. 1889, § 8925; Bramujell v. Lucas, 2 Barn. & C. 745: Foster v. Hall,12 Pick. 89; 1 Greenl. Ev. § 242. The books of the company were properly received in evidence. (I) Their identity was sufficiently proven. (2) They make a p1'ima facie case Itgainst defendant. Code Va. 1873. e. 57, § 27; Vanaerwerken V. Glenn, 85 Va. 9,6 S. E. Rep. 806; Stuart v. Railroad 00., 82 Grat.155; Tumbull V. Payson, 95 U. S. 418; Lehman v. &lenn, 87 Ala. 627, 6 South. Rep. 44; Semple v. Glenn, 91 Ala. 264,6 South. Rep. 46, and 9 South. Rep. 265; &len1i 'Y. Orr, N. C. 413, 2 S;iE. Rep. 588; Glenn v. Spl'ings, 26 Fed. Rep. 494; Railroad 00. v. Applegate, 21 W. Va, 172; Hammond v. Straus, 53 Md. 16; Wood v. Railroad 00., 320a. 273; Hoa,gland v. Bell, 36 Barb. 57; Rudd v. Robinson, 126 :N. Y. 113,26 N. E. Rep. 1046; Turnpike Road 00. v. Van Ness, 2 Crancll, C. C. 449; Owings v.Speed, 5 Wheat. 420; Hayden v. OottonFactory, 61 Ga. 233; Rev. St. Mo. 1889, § 2532; Gen. St. Kan. 1889, p. 383, § 1199; Say!es'Civil St. Tex. art.60l; Code W. Va. 1887, p. 493. § 19; 2 Rev. st. Ind. 1888, § 3500; Gen. St. Ky. 1887, p. 766, § ·16:3 Throop's Rev. St. N. Y. (8th Ed.) p. 716, § 17; Ann. St. Colo. 1891, p.643, § 508; Compo Laws Cal. 1853, p. 277, § 18;
tI.
389
Compo Laws Mont. 1888, p. 731, § 471; St. 8 & 9 Viet. c.16, § 28; Wilson V. Holt, 83 Ala. 529, 3 South. Rep. 321; Whart. Ev. § 701. Before CALDWELL and SANBORN, Circuit Judges, and SHIRAS, District Judge. SHIRAS, District Judge, (after stating the facts.) The first position taken by counsel for the plaintiff in error is that the decrees or orders entered by the chancery court of the city of Richmond, and by the circuit court of Henrico county, Va., making assessments upon the capital stock of the insolvent corporation, were mere nullities, for want of jurisdiction on part of said courts over the subject-matter and over the pany named as defendant therein: The contention on part of tiff in error is that the pendency of the suit brought by Reynolds in the United States court in 1866, and the appointment of the receiver in that case, with the powers conferred upon him, precluded the chancery court of the city of Richmond from taking jurisdiction over the company in the suit brought by W. W. Glenn in 1871; and that the assets of the corporation, including the liability of the stockholders for assessments upon the capital stock, became subject to the jurisdiction of the federal court in such sense that no other court could assume control over the same. This contention involves two propositions: First, that the pendency of the Reynolds Case in the federal court ousted the jurisdiction of the state court over the case brought by W. W. Glenn; and, second, that, granting jurisdiction over the case in the state court, the assets of the·· company were wholly withdrawn from the operation of any decree or order affecting the same made by the state court, by reason of the appointment of the receiver in the federal court. If it appears that two suits are pending in the same jurisdiction in which there is identity of SUbject-matter, of parties. and of relief sought, the pendency of the first suit may be pleaded in abatement of the second, on the ground that the bringing of the latter subserves no good purpose, subjects the party to increased expense, and is therefore vexatious; but the pendency of a: suit in a state court cannot be pleaded in abatement of a suit in a 'federal court, because the jurisdictions are, in this sense, foreign to each other. Insurance CO. V. Brune's Assignee, 96 U. S.588; Gordon V. GiJfoil, 99 U. S. 168. Furthermore, if the pendency of another suit in the same jurisdiction is pleaded in abatement, it must appear that the former suit presents the same case; that is, there must be identity in the interests represented, in the rights asserted, and in the purpose sought. Thus, as is said by the supreme court in Watson V. Jones, 13 Wall. 679: "But, when the pendency of such a suit is set up to defeat another, the case must be the same. There must be the same p'arties, or, at least, such as represent the Same interest; there must be the same rights asserted, and the same relief prayed for. This relief must be founded on the same facts, and the title or essential basis of the relief sought must be the same. The identity in these particulars should be such that, if the pending case had already been disposed of, it could be flleaded in bar as a former adjUdication of the same matter between the same parties,"
,390
.. I
REPORTEB,
vol. 51. · ·
In,,9W' the'case in the. name of Ueynolds is not identical with' that, brought in the name of W. W.Qlepn, according to the test by thisAecision of the ,court. Reynolds sued a's 'S: stockholder, and for the p'rotection and enforcement of the rights of himself anll all other stockholders. Glenn sued as a creditor on beha1Lof hil:neelf and such, other creditors as might unite in the proof the relief sought in the two proceedings was essentially dla;erent, theolle ()ounting upon the rights of the stockholders to controlJhe management, of the affairs of, the company, and as an to require to pay its the other upon the I'ight:'pf'Greditors to the. as!'1ets. of the com'pany, including the to the capital stock for the pll>yment of the debts unpaid not true that there is identity of interests, of title due. and of rights. between the stockholders and creditors. of a corporation. If in the Reynolds Case ,the ,federal court had refused to order an assesscllpital 'stock, cO\.l.ld such finding or decree have been ment upon pleaded in bar ot a suit by the creditors to enforce their rights? Cer· . tainly the :rights of cre4itors are not subject to be barred by proceedings had solely between the company a.nd its own shareholders. Furthermore, one of, the principal, objects of the, Glenn Suit was to obtain an 'adjudicaUon llpon the question of the validity of the deed of assignment corporatiOn, .and as to the rights of creditors under this executed by deed,-a purpose wholly without the purview of the bill, filed in the Reynolds cme. For these reasOnS we are of the opinion that, even if the pendency of the Reynolds Chse had be\3n pleaded in abatement of the Glenn Buit, which it was not, it would not have availed to defeat the jurisdiction ofthechancery court of the city of Richmond in that cause. 'J!1risdicti.,on of the case existing in that court, does it appear that it had jurisdictiop to make assessments upon the capital stock of the C0111pany, and to authorize the collection thereof by the trustee by it apto the deed, of assignment? It must be in mind that this court is dealing only with the question of the jurisdiction of the chancery court of the city of Richmond over the proceedings had before it. On, part of the plaintiff in error it is contended that the action had in the, rederal court in the Reynolds Cause in the appointment of a receiver subjected to the jurisdiction of that court the assets of the company, including the liability of the shareholders to calls upon the spares of lltock owned by them, and therefore the Richmond chancery court could not bring the same within its jurisdiction. The general doctrine that, in cases of concurrent jurisdiction, the jurisdiction of the court first taking control of the property involved is exclusive, does not justify the claim asserted by the plaintift in error. If it be admitted that the proceedings taken in the federal court in the Reynolds Case had the effect of bringing within the exclusive control of,that court the assets of the National Express & Transportation Company,and that it was within tlie power of that coort to have wound up the affairs of the company, y,etsuch exclusive control terminated when that court discharged the receiver, vacated all orders made by it, and dismissed the case.
LIGGETT 'D.
391
From tl1at' time forward the assets of the corporation were ,not within the control of the federal court,but were subject to the jurisdiction of ap1 other competent tribunal, Just the samaas though no suit had ever been brought in the federal court. From the record before us it appears that in the Re1Jllolds Case the only property that came into the actual pos,the receiver appointed by the federal court was two freight cars, 'which were sold, and the proceeds were used in meeting the expenses of the receiver. The title to these cars passed by such sale, but it does not appear that any other property came into the possession of the receiver, and the court did not make any assessmerits or calls upon the capital stock; so that the utmost that can be claimed is that the assets of the company, including the liability of the shareholders, was for a time within thejurisdictiori of the federal court, butsuoh jurisdiction was, by the act of that court; yielded upand terminated before any disposition of the assets of the company was made, except of the two freight cars named. The facts appearing upon the record bring the case within the rule stated in the leading case of Buck v. Oolbath, 3 Wall. 334, wherein it is said: "It is only while the pt'operty is in possession of the court, either actually or constructively, that the court is bound or professes to protect that possession from the process of other courts. Whpnever the litigation is ended, or the possession of the officer or court is discharged, other cOllrts are at liberty to deal with it according to the rights of the parties before them, whether those rights require them to take possession of the property or not." As already stated, the federal court on the 10th of December, 1880,' vacated the order appointing a receiver and dismissed the case pending before it, thereby terminating all control and possession, actual or constructive, of that court over the assets of the corporation. From that time forward there was nothing to prevent the chancery court of the city of Richmond from asserting jurisdiction over the corporation or its assets, and from dealing with the same as justice and the rights of creditors might demand. '1'heerrors assighed, based upon the assumed nullity of the decrees entered by the Richmond chancery court and the circuit court of Henrico county, for want ofjurisdiction over the corporation and its assets, thus appear to be without merit, and must be overruled. The next question for consideration presented by the argument of counsel arises on the plea of the statute of limitations of the state of Missouri, which provides that actions upon contracts, obligations, or liabilities, express or implied, are barred by the lapse of five years. Inthe cases of Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. Rep. 739, and Glenn v.Liggett, 135 U. S. 533, 10 Sup. Ct. Rep. 867, the question of the time when the statute began to run in favor of the stockholders was involved, and the supreme court held that, as against creditors represented by the trustee, the statute did not begin to run until the entry of the decrees of the chancery court and the circuit court of Henrico county. Counsel for plaintiff in error contends, in an able argument,that these decisions are not conclusive of the proposition, for the reason that the
392
REPORTER,
proceedings had in the Reynolds Case in the, United States circuit court were not' before the supreme court, and. the effect thereof was not considered upon. The contention of counsel is that the proceedings had in the Reynolds Case were such in legal effect that the stockholders were then called upon to pay ih the unpaid porti<;,ms of the capital stock held by them; that the receiver appointed by the federal court had the authority to enforce payment by suit ; and therefore the liability of the stockholders was so declared and established as that the statute began to run in their favor from the .entry of the decree in the federal court on the Slstof December, 1866. It is argued that the clause in that decree, declaring that," if there shall be any sums due upon the shares of the capital stock of said company,.the said receiver will proceed to collect and recover the same, unless the persons from whom the said sums shall be due are wholly insolvent, and for this purpose may prosecute actions at law or in equity for the of such sums," was, in substance and effect, a call or demand upon the stockholders; that the receiver was authorized to sue for all portions of the capital stock remaining unpaid without further order or call upon the stockholders, and, as the right of action had thus been created, time began to run in favor of the stockholders from that date. In our judgment, the decree of December 31, 1866, is not susceptible of this broad construction. From the allegations of the bill and answer in the Reynolds Chse, it appeared that there were stockholders who had failed to respond to the calls previously made by the company, and that steps pad been taken to sell the delinquent stock for such unpaid installments, and, in our judgment, it was this indebtedness that the receiver was authorized to collect. The very language of the clause indicates this, in that it is said, "If there shall be any sums due upon the shares," etc. Oertainly, if it had been. the purpose ofthe court to make a call for the 80 per cent. of the stock which then remained uncalled for and unpaid, other and more apt language would have been used than that found in the decree. Furthermore, it is not to be believed that the court, without any examination into the affairs of the company and without knowingwhether need existed for calling in the whole of the unpaid portion Qf the capital stock, amounting to $4,000,000, would have ordered such payment, and directed the receiver to enforce the same by legal proceedings. We conclude, therefore, that the decree of the federal court had reference only to calls already made, and that it cannot be held to be a call for the 80 pflr cent. which then remained uncalled for and unpaid. In our judgment, there was not an authorized call made upon the stockholders until the entry of the order in the Richmond chancery court on the 14th of December, 1880, and on that date, as is ruled in Hawkvfts v. Glenn and Glenn v. Liggett, supra, the statute began to run against the 30 per cent. assessment then ordered. It has already been determined, by the su preme court, in the case last cited, that, under the provisions of the Missouri statute, the bringing of the suit by the trustee in 1884, in which plaintiff suffered a nonsuit, and the recommencement thereof within a yeurt'rom such nonsuit, saved the
393
bar which would otherwise have arisen under the statute, in that the present action was not brought until more than five years after the entry of the decree of December 31, 1880. The conclusion is therefore that the trial court did not err in overruling the plea of the statute of tions. ' The next assignment of error discussed by counsel presents the question whether the stock ledger and stock transfer books of the were admissible in evidence on the issue whether the defendant below was a stockholder in the company. It cannot be questioned that, in the ordinary conduct of business in the community, books of this character are consulted for the purpose of determining who are the owners of the stock in corporate companies. In many of the states, statutes have been enacted requiring books of this character to be kept for the inspection of the public, and it is. also a recognized rule of law that persoIls whQ knowingly permit their names to appear upon the books of. a company as holders of stock therein may be estopped from proving the contrary, as against parties who have acted upon the faith of what thus appears upon the face of the books of the corporation. On principle it would seem ,to be true that ordinarily whatever is received and acted upon by the business community, as proper evidence of a given fact, may be mitted in evidence when the existence of the fact is a matter to be proven in the trial of It cause in court. Thus in the case of TurnbuUv. Payson, 95 U. 8;418, it is said: . . "Where the name of an individual appears on the stock book of a corporation as 8 stockholder, the prima facie presumption is that he is the owner of the stock, in a case where there is nothing to rebut that presumption; and, in an action against him as a stockholder, the burd('n of proving that he is not a stockholder, or of rebutting that presnmption. is cast upon the defendant."
To create this presumption, it must appear that the book contains the name of the person whom it is claimed is a stockholder. In other words, it must be shown by the contents of the stock book, or by extrinsic evidence, or by both combined, that the name found in the book was so entered therein as the name of the party to the litigation. What amount of evidence may be needed to establish this necessary connection will, of course, vary with circumstances. The trial court held that in this case the plaintiff below could not rely upon the mere identity of name, but must produce other evidence sufficient to show that the person sued is the same person whose name is registered in the stock books.. If proper evidence of this connecting fact was produced, then, in our judgment, the court below ruled rightly in admitting the stock books in evidence. The next question discussed by counsel arises upon the action of the trial court in aclmitting in evidence what is termed the "fee contract," over the objection that the same, for the purpose for which it was offered in evidence, was a privileged communication between attorney and client. The facts touching this contract appear to be asfo11ows: In the year 1867 the National Express & Transportation Company drew a number of drafts upon parties residing in St. Louis, Mo., claimed to be
for assessments on the capital stock, and deto the Bank of Commerce of Baltimore, Md. To enf9rce, paYme1;lt or these drafts, suits were brought at St. Louis, some t:v,ventJ'Q.F"P,l,¥,ejnnumber, in the name of the of Commerce, one of the same being against Liggett, plaintiff in error herein. Messrs. Bogy, Holliday were associated together as attorneys for the defendants suits, including the one against plaintiff in error. On the 28th of August, 1867, the following agreement was signed by other, parties interested as defendants in the suits brought by the Bank of Commerce: "We,tbe.ulldersigned, desirous of resisting any further payment to the National. and Transportation Company, hereby agree to pay Bogy, Ewing our attorneys, two thousand dollars, they to btl at all expenses of trayeljng, and to defend all suits brought against us by the Bank of CommetcEJ of"Balthnore, or by the said express company or its receiver, for any calls made up to the present time. The expense of such defense to be bOI"ne by'Ull pro rata ontheamount of stock subscribed by us as set opposite our names herein, and no assessment to be made or defense undertaken, unless signatures be obtained hereto representing fifteen h\lndred shares of said stock. ,8aid pro rata at no time to exceed the proportionate share of two 'thousand dollars at this, the time of our signing. Signed at St. Louis, Mo., thill28th day of August, 1867."
, This contract passed in,to the personal control of Mr. Holliday, who testified that he acted as attorney uncier the contract for Mr. Liggett and that oneof the signers thereof was one W. S. Stewart"wh() subilequently died, and in 1886 Mr. Holliday proved up his oia,im his liS a voucher therefor, the contract was filed by:M,r. Holliday in the probate court of the city of St. Louis. Ital80 appeared:' in the evidence that,without the knowledge of Mr. Holliday, ,coun,sel for plaintiff' in the" present action had procured the from the probate court, and on trial of this cause in the below, jl.fter offering evidence tending, to prove the genuineness of tbesignature of plaintiff in error found attached thereto, offered the cO,ntractas anadmi&aion in writing made by plaintiff in error to the effect that he was a stockholder in lheexpress company, holding the opposite his signature. The trial court, over the objecti()o that the statements in the agreement, being confidential communications between counsel and client, were privileged,admitted the same, and the question is as to the correctness of the ruling. , COllnsel in their briefs have discussed at some length the provisions of the statute of Missouri on this subject, which declares that an attorney shall not be permitted to testify "concerning any communication xpade to him by his client in that relationar his, advice thereon, without the cousent of such client." In ,view of the decision of the supreme co.urt in I'ftB1!,rance Co. v,. Schaifer, 94 U. S. 457" it would seem that the Prqvisions of the state,statute /lre noti,applicable to this question of evidence when the same. arises in the courts of the United States. In that it was urged that 1;Ioder the Jaws of Ohio1 .the communication " not, priyileged:; but the supreme court said that-
395
"An examination of the Ohio statutes rendE-rs it doubtful whether the law is as the defendant contends; but. if it were. the court did right to exclude as rules of decithe testimony. The laws of tbestate are only to be sion in the courts of the United States where the constitution. treaties. or statutes of the United States have not otherwise provided. When tbe latter speak, they are controlling; that is to say, on all subjects on which it is competent for them to speak. There can be no doubt that it is competent for congress to declare the rules of evidence which shall prevail in the courts of the United States not affecting rights of property, and, wherll congress has declared the rule, the state law is silent. Now, the competency of parties as witnesses in the federal courts depends upon the act or congress in that behalf passed in Ul64, amended in 1865, and cod; fied in Rev. St. 858. It is not derived from the statute of Ohio. and is not SUbject to the conditions and qualifications i1llpo!led thereby. The only condtions and qualifications which congress deemed necessary are expressed in the act of congress, and the admission in evidence of previous communications to counsel is not one of them; and it is to be hoped that it will not Iloon be made sllch. The protection of cunfidential communications made to professional advisers is dictated by a wise and Iiheral policy. If a person cannot consult his legal advisl'r without liable to have the interview made public the next day by an examination enforced by the courts, the law would be little short of desputic. It would be a prohibition upon professional advice and assistance." In the cage of State v. Dawson, 90 Mo. 149, 1 S. W. Rep. 827, the supreme court of that state held that the section of the state statute already cited is only declaratory of the common law; that" it is not designed to, nor does it, narrow the common-law privilege." So far, therefore, as the particular point nolY under consideration is concerned, the correctness of the ruling; made by the trial court is not dependent npon the question whether the state statute is applicable or not. The general doctrine upon the subject is fairly stated in 1 Wait, Act.> & Def. p. 468, in the fonowing terms: "It is the general rule that communications betwpen attorney and client. in referellce to all matters which ar'" the proper subject of pl·olessional employruellt, are privileged. This includes all communications made lIy a client to his attornl'Y or cuunse:. for the purposes of profl'silional advice or assistance, whether sllch all vice rt'lates to a suit pl'nding, one contemplated, or to any other Illatter propel' fol' such ad vice or aid." It is also well settled that the privilege is for the benefit and protection of the client. Thus it is said by the supreme court inChirac v. Reinirker,l1 Wheat. 280: "The general rule is notdispllted. that confidential commnnications between cl)ent and attornpy are not to he revealed at any time. The privilege. indel'll. is not that of the attorney, uut of the client, and it is indispemable for the of pri vale j "stice. Whatever factil, therefore. are cummunicatl'd by a client to cOl1nsel. solely on account of that rplation, such coun. sel are not at liberty, even if they wish, to disclose, anlt the law holds their testimony in"ompelent." In considering questions of this kind, regard must be had to nature of the evidence sought to he elicited. It not unfrequently happens that deeds, contracts, or other written instruments· may be delivered by a the attorney cannot client to ail attorney under such circumstances be compelled or permitted to produce the same ill ",vidence against his
390"
FEDERAl, REPORTER,
vol. 51
cHeut at the demand of Illl adversary party. In this class of cases the deed or other. written instrument is not itself It is merely the pOSsession of the attorney that is protected. As he received the instrument by reason of the confidential relation of client and attorney, he cannot be compelled to yield up such possession at the demand of another, nor to reveal the contents of the paper. In such cases, however, it is open to the other party to provtl, by any other competent evidence, the contents of the papei:' because the same are not, in and of themselves, privileged. The decisions in this class of cases do not touch the principle that is involved in the matter of confidential communications, between client and counsel. In the latwhether oral or written, ter instance, the privilege attaches to the cO!11munication iklelf. In order that there may be perfect confidence established between client and counsel, and upon considerations of enlil-{htened public policy, the rule l).IlS been established that the client may freely communicate to his counall facts cqnnected with the subject out of which grows the relation ip question, and that the communication, thus confidentially made, cannot be used in evidence against him, unless he himself, by some unequivocal action on his part, deprives the communication of its privilegedcharacter, and thereby renders it competent evidence against himself. "To fairly carry out the real purpose of the rule, it must be held that privileged communications are, in and of themselves, incompetent, regardless of the mere manner in which it is sought to put them in evidence. It is argued by qounsel for defendant in error that the admission contained in this so-called "Fee Contract" was properly admitted, because it was produced by counsel for defendant in error, and not by Mr. HolFday, in whose custody it originally was, and that there was no breach of duty on part of the latter, in connection with the procurement and production thereof, by counsel for the trustee. The admissibility of the communication, in our judgment, is not dependent upon the manner in which control thereof is obtained from the counsel; but upon the inherent character of the communication itself. If the admission or statement sought to be put in evidence was made by reason of the confidential relation existing between client and counsel, it becomes Ii privileged communication, and as such it is not competent evidencellgainst the client. Its competency is llot dependent upon the mere manner in which knowledge thereof may be obtained from counsel. The principle forbidding its use is not adopted as a 111ere rule of professional conduct on part of the attorney. It confers a right upon tb.e,cIient for his protection and adv,llntage, and which he alone is autliotized to waive. It will not do to hold that the communication loses ita cpn6dential and privileged character if knowledge thereof can be obtained by means which do not involve the counsel in a breach of profesFor illustration, a letter i$ written. by a client to hisattorsional statements pi a privileged nature. The counsel, having on hifil person, meets with an accident, causing his death. parties in this way become possessed of the letter, and from them it to the of the ad versar>' party. Has this letter lost
397
its privileged character and become competent evidence against the writer, simply because it passed from the possession of his counsel, to whom it was written, without fault on part of the attorney? Suppose that, upon a trial of a cause, an attorney is sworn as a witness, and he is asked to produce a letter written him by his client. He refuses, on the ground that it is a confidential communi0ation. The trial court overrules the objection, and compels the production of the letter, which is filed as part of the evidence in the cause. An appellate court reverses the ruling of the trial court on this question, holding that the letter was privileged, and sends the case back for a new trial. On the second hearing, the attorney is not called as a witness, but the clerk, in whose custody the letter was placed on the first trial, is summoned by a 8ubpaJna duces tecum, and required to produce the letter in order that the same may be read in evidence. Is it possible that this letter, being a confidential communication between client and counsel, can be rightfully put in evidence upon the theory that the possession thereof was obtained without fault on part of the attorney? The argument, founded upon the assumption that the admissibility of confidential communications between client and counsel is dependent solely upon considerations of the duty of counsel not to make known that which was communicated to him professionally, is, in our judgment, faulty, in that it ignores the main purpose of the rule, which is that the client shall be at liberty to freely communicate to his attorney knowledge of all matters connected with the business in hand upon the assurance that confidential communications thus made are privileged and cannot be used in evidence against him, unless he deprives them of their privileged character. In the case at bar, therefore, the question for determination is whether the admissions contained in the so-called j'Fee Contract" are privileged. If they were, then it was error to admit the same in evidence, even though it may be true that possession of the contract was obtained by counsel for the trustee without any breach of professional duty on part of Mr. Holliday. Extended discussion is not needed to show that the admissions contained in this contract are privileged. Suppose Mr. Holliday had been called as a witness by the trustee and he had testified that he had been retained hy Mr. Liggett to defend him against all suits brought against him by the Bank of Commerce of Baltimore, or by the express company or its receiver, to enforce the calls up to that date made upon the capital stock of the company, and thereupon counsel for the trustee had asked him to state what admissions his client had made to him in regard to ownership of stock in the corporation and the number of shares held by him, certainly, upon objection made, it would have been held that admissions thus made were privileged, The fact that the admissions sought to be put in evidence are contained in a letter written to counsel, or in any other written instrument, does not change their character, so long as it appears that the letter, contract, or other writing is in fact a communication between client and counsel, and was created or called into existence by reason of that relation.
398
FEDERAL REPORTll:R,
The muinground upon which the trial court held the contract admissible was that it "contained no admissions or statements nmde bya eliedt tOJ llisattoi'ney with a view of obtaining any advice thereon. The conti'a6t wholly to the fee that should be paid, and the propor. tions'in 'whioh the several signers should contribute to 'its ipayment., It stlind&,;therefore, on the sllme basis asa contract made' by the defend· ants with a :personnot an attorney, in relatiorito any other subject-mat. ter'whichmight have falleninto·the plaintiff's hands." ,The contract to pay related wholly to the fee.to be paid counsel, but the admissions in regard to the ownership of stock in the express company, which is the otllypart of the contract sought to be used in evidence in this case, certainly would not have been made, unless the relation of client and counsel had existed between the parties; neither is' the.protection of the rule limited to statements made by a client for the purpose of obtaining advice thereon from his attorney. A client may state the facts connected with a transaction touching which he desires the professional services of counsel, and may direct the action he wishes to have taken, and the cotnmutlications thus made will not be stripped of their confidential character simply because the client may not technically ask or receive advice in regard thereto at the time the statements are made. Under the provisions of the Missouri statute, as well as under the common-law rule, the advice given by counsel is privileged as well as the communications made by the client; 'but to render the latter privileged it is not necessary that they should form the basis lor the giving of advice on part of counsel. Many statements of fact Ilre doubtless made by cli,'nts to counsel, by rea SOIl ofthe confidential relation existing between them, which are ;never made the sUbject of consultation nor of advice on part o:fcbunsel,lJor the basis for professional action, but they are nevertheless communications, because thq owe their existence to the relation 'occupied by the parties when they were made. The conclusion we reach is that the statements or admissions contained in the so-called "Fee Contract," being a communication from -client to ('ounseJ,and which it is clpar would not hllve been made had this relation not existed between the parties, were, when the same were made', "confidehtialand privHeged; that being SOl they were, for that renson, 110t (1o'lbpetent evidence on behalf of the trustee in this case, it not apllea:ringthat the plaintiff in error had, by action on his part, depriv.ed thent.loftheir character; and that it was therelore error to adnilit in evidence in the present caSe. 'the t'i'ial'ceurt relied u\lonthe admi8sionscontained in this contract for ;theplli'pose of connectihg the defendant in the action with the stock books'otlered inevidence;......holding ,that under the' circumstances of the ciiWtbeplaintiff could the tnere identity of name, as a .identification of tbede:endant as the person whose name appearson the stock books; i It is strongly urged in argument by counsel fOr the trustee tha.t the of the stock books made out a prima 'against the delendant;a:nd thel.'etore the admission of the in:etror asrequiresth.e reversal of the competent evidence is not sueh:
the mere identity of.nameis sufficient to justify the sNrrlptiOll that the entry in the hooks refers to the defendant in a given be dependent upbn circumstances. It is entirely possible that in some instances the entry itself may be such as to point with sufficient certainty tothe defendant, po that the trial court would be justified in holding, in the absence of contravening evidence, that the identification made out; but, on the other hand,from the fact that was the name appearing on the stock books is one common to several persons in the community, or from other circumstances, it may well be that the trial court should demand some evidence of identification other than that appearil1gnpon the books. In this case we do not have before us all the evidence. introduced, and we cannot, therefore, say that from all the evidence the identity of the defendant with the person .whose name appears u!l0n the stock books was sufficiently established. It was a question of fact to be determined by the trial court, and we cannot say that the evidence adduced, aside fromthat which we hold was improperly admitted, was such that only one. conclusion could be reached thereon. The.error in admitting the privileged admissions found so-called" Fee Contract" was therefore one which demands a reversal of the judgment and a retrial of the case upon its merits. . In entering up judgment on the asseElsments sued for, the trial court allowed interest on the same from the time this action was brought. Thetru.stee moved to set aside this judgment, and to enter a new judgment, including interest froni the date of the decrees ordering the calls or which motion the court refused, and thereupon the trustee. sued otit a writ of for the p.urpose of presenting this question to this court. In Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. Rep. 739, the supreme court cites the section of the Code of Virginia, which provides that, if an assessment upon shares l' be not paid as required by the president and directors, the same, with interest thereon, may be recovered by warrant, action,.or motion as aforesaid," and states that "interest would therefore seem chargeable from the date of the call." The statute of Virginia enacts that interest Js recoverable if the assessment is not paid as required by the president and directors of the corporation, or, in other words, interest begins to run from the time fixed for payment of the particular call. It is a well-settled principle, in making assessments upon corporate stocks, that there must be equality in the burden imposed upon the stockholders. 'The time when a given ,assessment becomes payable may depend upon the provisions of the charter or by-laws of the partiCll1ar corporation, or upon the terms of the ,call itself, or possibly on the practice adopted in collecting assessments by the parties charged with that duty. Thus the charter or by-lll.wsof a corporation may provide <that all assessments shall be payable in a cert,!1in number of days aftet the call is ordered, or after by publication or otherwise, or, if the charter and by-laws are silent on the subject, the calls as ordered from time 'to time may fix the dat(l of payment. The general rule of law, under the statute of Virginia,is"that in paymentibut the interest i/3 re(loverablefrom the time of. ,.".". , .
400
J'BDERAt Bm'OR'1'EB,
stockholder not in default until the date when the particular call requires paym:ent to be made. Thus the time when interest becomes chargeable dependent upon a question of fact to be determinedaccorqiQg to the evidence in the case. To determine the time when the calls made upon the capital stock of the National Express & Transportil.tion Company became payable, so a,s to create a default against nonpaying stockholders, it is necessary to know what the provisions :of the charter and by-laws may be upon this subject. If, upon tlie producti.onthereof, it should, appear that they are silent upon the subject, thep, ,under the terms of the calls themselves. it would seem, in the language of the supreme court in Hawkins v. Glenn, '8Upra. that inter,est is from tp,e date of the call. 'The record before us does not conqtinthe complete charter and by-laws of the express company. :Whether the were introduced before the trial court, we do not know The bill of not purport to setforth all the evidence introduced, <m the but, on the contrary,affirms that it contains only a portion thereof. It may well be, therefore. that the charter and by-laws, were i[l, evidence before the' trial. court, ahd that the provisions thereof were such as' to justify the' ruling made on, this question. Whether t1:lere is errol in the ruling depends upon the state of facts made to before that court,and we do not think we are sufficiently advised upon point to authorize us to consider the question. As it does not, 'therefore, affirmatively appear that there was error in the ruling' complained of, the same must be ,affirmed. , ' For the error pointed out in the adnH,ssion of evidence the judgmentii reversed., and the case is remanded to the circuit court for a new trial.
PRIESTtI. GLENN. GLENN tI. PRIEST.
(Clrc'uU Coun oj' Appeals, Eiqhth OircuCt. June 18. 189B.)
Nos. 77, 78. 1. 'CORPORJ.'lIO:tti-i-Ac:mONS J'OR ASSESSMBNTS-EvItn:NoB 01' BbBsOJUPTIOlf. In an Mtjonagainst an alleged stocl!:holder in the" National Express & tatiop CpmpallY "to recover IIoIl assessment on the stock,a contract of SUbscription "'to the stock of the "National Express Company" is admissible to prove the fact of subscription, when it appears that in theprooess of organization there was a change from,the latter tP tlte former namei and th.at defendant was entered on the stock bOoks of'the former as the owner Of certaIn shares, which he afterwards assigned. B.BJ.lI:B-AsSBIiSHBlM'8-LuBILITY OJ' ASSIGNOR OJ' STOOK.
3. S.ure-Lnn'TA'l1:o:/(. , ..' .' T4e a stockholdezr" not lillble to suit for unpaid portions of the capiW stock until an authorized call or asseaament hall been made upon the stock held by
Under Coqe Va. 1860, 18. Q.57, and Code 1878, o. 57, an assignor of in a corporation remailllliable tor the unpaid portions of thestook, though the assig'Iul. ,alsobecomesliable. HamUwnv. Glenn. 9 S. E. Rep. 129, 85 Va. 901; McKimv. ,Gumm.. 8 Atl.Rep. 1llO, 66 lid. and Bambl£um v.o£enn, 20 AtL Rep. 115.7t "Md. 881.':':'fOllQwi!a.