Opinion
No. 101.
Argued September 5, 1972. —
Decided October 3, 1972.
APPEAL from a judgment and an order of the circuit court for Milwaukee county: ELMER W. ROLLER, Circuit Judge. Affirmed.
For the appellant there was a brief by Joseph P. Balistrieri, attorney, and Dominic H. Frinzi of counsel, both of Milwaukee, and oral argument by Mr. Balistrieri.
For the respondent the cause was argued by Thomas A. Hendrickson, assistant attorney general, with whom on the brief was Robert W. Warren, attorney general.
On October 24, 1969, Joseph P. Balistrieri, the secretary-treasurer of Bals, Inc., was subpoenaed by the Wisconsin department of revenue to appear at 2 p.m. on November 10, 1969, to give testimony regarding the tax liability of the corporation of which he was an officer. The subpoena directed him to bring with him corporation records, including the stock certificate record book, the corporate record of names and addresses of the shareholders, and minutes of the meetings of the shareholders and the board of directors. The defendant appeared at the specified time and place with counsel.
Balistrieri was questioned by Donald R. Murphy, a special tax agent of the intelligence section of the Wisconsin department of revenue. Murphy asked the defendant his occupation and if he had brought with him the corporation's stock certificate record book. The defendant refused to answer each question, claiming a privilege against self-incrimination under the fifth amendment. At this point, the assistant attorney general advised the defendant that the fifth-amendment privilege did not apply to the production of corporate records. Agent Murphy then asked the defendant whether he had brought the minutes of the proceedings of the shareholders and the board of directors of Bals, Inc. Again the defendant declined to answer on the ground of fifth-amendment privilege. A number of questions were then addressed to the defendant, asking whether he had brought each of the documents directed by the subpoena. The response to each question was the invocation of the fifth amendment. He was asked by Murphy, "Am I to understand that you refuse to produce any of the corporate records that we requested; is that correct?" The defendant again refused to answer on the same ground and refused to identify signatures appearing on tax returns that were displayed to him. The meeting was terminated at this point.
The subpoena served upon Balistrieri on October 24, 1969, provided that the subpoena would be enforced according to sec. 885.12, Stats. That statute provides:
"885.12 Coercing witnesses before officers and boards.
If any person shall, without reasonable excuse, fail to attend as a witness, or to testify as lawfully required before any arbitrator, coroner, board, commission, commissioner, examiner, committee, or other officer or person authorized to take testimony, or to produce a book or paper which he was lawfully directed to bring, or to subscribe his deposition when correctly reduced to writing, any judge of a court of record or court commissioner in the county where the person was obliged to attend may, upon sworn proof of the facts, issue an attachment for him, and unless he shall purge the contempt and go and testify or do such other act as required by law, may commit him to close confinement in the county jail until he shall so testify or do such act, or be discharged according to law. The sheriff of the county shall execute the commitment."
In accordance with the provisions of the statute, the state immediately after the meeting was terminated obtained a writ of attachment. The defendant was brought before Judge ROLLER shortly after 5 p.m. on the same afternoon, November 10, 1969. Special agent Murphy was called to testify, and he recounted the events of the afternoon as set forth above. The defendant's attorney stated that he wished to have a determination made of whether his client had properly relied upon the fifth amendment, but he further indicated that the writ of attachment had caught him by surprise and that he was not prepared to argue that question.
Judge ROLLER ruled that the fifth amendment was not properly invoked under the circumstances here, where the tax department was asking for the production of the records of the corporation. He found the defendant guilty of contempt for failure to produce the records, and he asked Balistrieri's attorney whether the defendant proposed to purge himself of the contempt by the production of the documents. The attorney asked for a reasonable amount of time to secure the documents and stated:
"All I was interested in was getting a judicial determination whether or not our invocation of the fifth-amendment privilege was valid. Now that I have had that determination, I am satisfied."
After further questioning and after finding that the subpoena had been served on October 24, 1969, and after finding out that defendant and his counsel had relied upon the fifth amendment from the time of the subpoena, the trial judge refused the request for a lengthy adjournment to marshall the records. Upon assurances by the defendant and his attorney that they would attempt to produce the documents and purge the contempt, the court adjourned the matter until 9 o'clock the following morning. The trial judge stated that no commitment would be made immediately, but upon the failure to produce the documents the following morning, a commitment to the county jail would issue.
On the following morning the defendant returned at the appointed time with counsel. At his own attorney's request, he took the stand, and during the course of the examination produced some of the documents requested in the subpoena. He testified that he had no knowledge of the existence of a stock certificate record book or the minutes of any shareholders' or board of directors' meetings which had been requested. Upon cross-examination by the assistant attorney general, Balistrieri again invoked the fifth amendment and testified only when he was directed to do so by the court, on the ground that the fifth amendment was not applicable to corporate records and that he had been testifying on the same subject matter on direct examination.
The defendant stated, in response to questioning, that he had been the secretary-treasurer of Bals, Inc., for three or four years. He alleged that he was unfamiliar with any of the records and had not worked with them. He stated that, in order to purge himself of the contempt, he had called the corporation's bookkeeper the night before. He acknowledged that he had not made any other effort to locate the subpoenaed records and had spent the evening socializing. Before leaving home in the morning, he found some records lying on the kitchen table and assumed that they had been left there by the bookkeeper. He said that he had not inspected the records to determine whether they included all records subpoenaed. He was given an opportunity to produce the remaining records during the noon recess.
The court in its afternoon session found that the defendant had not produced the stock certificate record book, the corporation minute book, and the records of corporate income and capital expenditure on which amortization and depreciation had been computed. The court found that the defendant had given evasive answers to the inquiries directed to him and had made "no honest, fair, good faith effort to purge himself of the contempt."
The court again found the defendant to be in contempt and sentenced him to the county jail until the records were produced, but in no event was the confinement to continue for more than sixty days. The state's disbursements were imposed as costs.
Motion to vacate the judgment was denied. Pending this appeal, the defendant, after two days' incarceration, was released on his own recognizance.
Balistrieri's principal contention is that the alleged contempt was civil in nature and could only have been brought under ch. 295, Stats. Particular emphasis is placed upon the court's failure to follow the procedures of sec. 295.12. That section of the statute, if applicable, requires, unless the defendant admits the facts charged, that interrogatories be filed specifying the facts and circumstances of the alleged contempt.
We conclude that ch. 295, Stats., is inapplicable.
Sec. 295.01, Stats., provides that a court of record or a judge of a court in chambers shall have the power to punish for contempt:
". . . any misconduct by which the rights or remedies of a party in an action or proceeding pending or triable in such court or before a court commissioner for the same county may be defeated, impaired, impeded or prejudiced . . . ."
In this case, contemptuous misconduct occurred in an administrative proceeding. There was no action or proceeding either pending or triable in any court. The contempt alleged here was not a judicial contempt. It was a contempt committed by a refusal to comply with a subpoena of an administrative agency.
Sec. 885.12, Stats., provides that the failure to attend as a witness before a board, commissioner, examiner, etc., to testify as required or to produce a book or paper, unless there be a reasonable excuse, constitutes contemptuous behavior. This statute contemplates that, though the alleged contempt be committed before the administrative agency, the opportunity to purge the contempt is available in a court, and punishment for the contempt is imposable only in a court proceeding. The plain meaning of the statute is set forth when it recites that the trial court:
". . . may, upon sworn proof of the facts, issue an attachment for him, and unless he shall purge the contempt . . . may commit him to close confinement in the county jail . . . ."
Judicial contempts and their punishment are embraced in ch. 295, Stats. A contempt alleged to have been committed in an administrative proceeding is properly reviewed and, if appropriate, punished by court procedures under sec. 885.12.
The distinction between the two statutes is pointed out in State ex rel. Lanning v. Lonsdale (1880), 48 Wis. 348, 4 N.W. 390, where an attempt was made to punish a judicial contempt by a proceeding under sec. 4066, Rev. Stats. 1878, which, with minor exceptions, is identical to present sec. 885.12. The court said at page 364:
"No judicial tribunal or officer is here named, and the section contains no express mention of testimony taken to be used in a judicial proceeding in the courts. Moreover, the section confers jurisdiction upon a judge of a court of record, or a court commissioner, to attach the witness, only `upon sufficient proof of the facts by affidavit.' This clearly contemplates a contempt committed in a proceeding before some tribunal or some person other than the judge or commissioner before whom the attachment proceedings are instituted. Had the legislature intended the section to include contempts by witnesses summoned to give depositions in judicial proceedings pending in our own courts . . . it is fair to presume that the power to attach a contumacious witness would have been expressly given to the commissioner taking the deposition."
Contempt of an administrative agency contemplated by sec. 885.12, Stats., is civil in nature inasmuch as the defendant may purge his contempt and accomplish his own release. Maggio v. Zeitz (1948), 333 U.S. 56, 68 Sup. Ct. 401, 92 L. Ed. 476. The procedure is nonetheless that described in sec. 885.12. See also.: State ex rel. St. Mary's, Hospital v. Industrial Comm. (1947), 250 Wis. 516, 520, 27 N.W.2d 478, wherein this court stated that a person served with a subpoena duces tecum by the industrial commission, "must either furnish the records requested or be subject to the procedure imposed by secs. 102.17(3) and 352.12 [now appearing as sec. 885.12], Stats."
The defendant relies upon State v. Marcus (1951), 259 Wis. 543, 49 N.W.2d 447, for the proposition that, in Wisconsin, administrative officers have no power to punish contempts committed against them while acting in their administrative capacity. While that proposition is correct, it is inappropriate to a situation where, as here, a judicial tribunal is authorized by statute to impose punishment for a contempt committed before an administrative agency.
Defendant argues that sec. 295.12, Stats., should have been employed because it requires the filing of interrogatories. Even under sec. 295.12, however, the defendant is not entitled to interrogatories unless he demands them. Upper Lakes Shipping v. Seafarers' International Union (1964), 23 Wis.2d 494, 128 N.W.2d 73. Therein we said that, even under the procedures of sec. 295.12, the failure to demand interrogatories constituted "an intentional affirmative waiver of his rights under the relevant statutes." (P. 506.) In any event, interrogatories only serve to sharpen the issues when there is a dispute whether the defendant had in fact committed the conduct charged. Here, there was no factual dispute to be reconciled through the propounding and answering of interrogatories.
No element of due process was denied in these proceedings. The defendant was given notification seventeen days before the administrative hearing that he would be required to produce certain records and that failure to do so could result in contempt proceedings being brought under sec. 885.12, Stats. Balistrieri's attorney acknowledged that, from the time the subpoena was served, he and his client were relying upon the fifth amendment to avoid the production of records. It can hardly be said that a defendant with counsel who has expressed that from the outset he was placing reliance upon a particular defense can now be heard to state that he was caught unprepared or that the writ of attachment was issued without reasonable notice. Additionally, the circuit court adjourned the matter for further hearing on the following day, but no legal defenses were further argued or raised on that occasion.
The defendant's brief appears to claim that he was punished for contempt because he had refused to testify after the invocation of his alleged fifth-amendment privilege. The record, however, shows that the only reason for the imposition of the finding of contempt was Balistrieri's failure to turn over the subpoenaed records in the tax department proceedings.
The fifth-amendment privilege does not attach to the records of a corporation. United States v. Kordel (1970), 397 U.S. 1, 7, 90 Sup. Ct. 763, 25 L. Ed. 2d 1; Brussel v. United States (1969), 396 U.S. 1229, 1230, 90 Sup. Ct. 2, 24 L. Ed. 2d 53; Curcio v. United States (1957), 354 U.S. 118, 122, 77 Sup. Ct. 1145, 1 L. Ed. 2d 1225; United States v. White (1944), 322 U.S. 694, 699, 64 Sup. Ct. 1248, 88 L. Ed. 1542; Hale v. Henkel (1906), 201 U.S. 43, 75, 26 Sup. Ct. 370, 50 L. Ed. 652.
When books and records are kept in a representative capacity, as here, where Balistrieri was the secretary-treasurer of the corporation, the privilege does not attach even though the production of the papers could tend to incriminate their custodian personally. Rogers v. United States (1951), 340 U.S. 367, 372, 71 Sup. Ct. 438, 95 L. Ed. 344. In Curcio, supra, the United States Supreme Court stated that:
"A custodian, by assuming the duties of his office, undertakes the obligation to produce the books of which he is custodian in response to a rightful exercise of the State's visitorial powers." (Pp. 123, 124)
They may not be withheld on the ground that the documents might personally incriminate him. Curcio, supra, page 122.
The question, then, is simply one of the sufficiency of evidence. Did Balistrieri have "reasonable excuse" to justify his failure to produce the books and records required. He argues that the contempt cannot stand because there was no evidence that he ever had the books and records in his possession when he was subpoenaed or that he ever was the custodian of the requested documents.
It is true that a person cannot be punished for contempt for failing to comply with an impossible order. In this case, however, Balistrieri admitted that he had been secretary-treasurer of the corporation for several years. Under Wisconsin law the defendant was the legal custodian of the corporation's books and records. In re Adam's Rib, Inc. (Kaminsky) (1968), 39 Wis.2d 741, 747, 159 N.W.2d 643, points out that, under these circumstances:
"The burden was not upon the respondents to prove the appellant could comply with the order of the court. It was, at this point in the proceeding, incumbent upon the appellant to offer some satisfactory explanation of his failure to comply with the court's specific and direct order. Appellant offered nothing other than his own denial to show he did not have possession of the records and a statement that others had used the records at various times."
The trial court made the finding that the defendant had given evasive answers to inquiries on the stand and had made "no honest, fair, good faith effort to purge himself of the contempt." Once the link was established between the corporation and the defendant as the legal custodian of the records, the burden of showing a reasonable excuse for their nonproduction fell upon Balistrieri.
In In re Adam's Rib, Inc. (Kaminsky), supra, we pointed out that the findings of fact in a civil contempt proceeding are conclusive unless contrary to the great weight and clear preponderance of the evidence. In the instant case, the defendant was able to produce a number of the requested records when the proceedings were resumed on the morning of November 11, 1969. Following the noon recess, he produced still additional records. In In re Adam's Rib, Inc. (Kaminsky), supra, page 747, we said that the production of a portion of the records supported the inference that it was within the power of the contemnor to produce the balance of them.
The trial judge concluded that the defendant's testimony was evasive and contradictory. The trial judge, as the trier of the fact, could properly conclude that the conduct of the defendant and his mode of testifying made his denials incredible.
The defendant had been in contact with the bookkeeper the night before, and it is highly likely that she would have been available to testify if any of the records had been destroyed or lost while in her possession. The defense made no attempt to assume its burden to explain the nonproduction of these documents. On the other hand, the testimony of special agent Murphy, which indicated that the corporation had in its income tax returns been making claims for deductions for the amortization of capital expenditures, could lead only to the inference that the underlying subpoenaed documents existed.
The trial court's finding that the defendant without reasonable excuse failed to produce the subpoenaed documents is not contrary to the great weight and clear preponderance of the evidence.
By the Court. — Judgment and order affirmed.