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Dawn Operators, Inc. v. Lyon

Supreme Court of New York, Appellate Division

March 2, 1954

In the Matter of DAWN OPERATORS, INC., Appellant,
v.
WILLIAM A. LYON, as Superintendent of Banks of the State of New York, Respondent.

Page 359

APPEAL from an order of the Supreme Court at Special Term (AURELIO, J.), entered October 30, 1953, in New York County, which denied a motion by petitioner to vacate a subpena duces tecum.

COUNSEL

Samuel M. Rivelson for appellant.

Adelbert C. Matthews, Jr., of counsel (Wendell P. Brown; Nathaniel L. Goldstein, Attorney-General, attorney), for respondent.

BERGAN, J.

The petitioner Dawn Operators, Inc., is described in the words of its president as a corporation 'engaged entirely in the real estate business' and 'conducting no banking operations of any kind and not affiliated with any banking corporation of any kind'. But on October 22, 1953, a State bank examiner sought to examine the books and records of the corporation, and meeting refusal of access, he served a subpena duces tecum issued in the name of the Superintendent of Banks and requiring the corporation to produce before the superintendent its books and records and checkbooks for 1952 and 1953.

The subpena recited that the records described were deemed by the superintendent 'relevant and material' to an inquiry into 'the conduct and affairs generally of John Doe and others'. The petitioner thereupon moved at Special Term for an order vacating the subpena. The motion having been denied, petitioner appeals.

The Superintendent of Banks has, of course, no blanket power to issue at will subpoenas to require any citizen or corporation to bring in private books and records for his general inspection. The subpena power does not operate in a vacuum but always in the context of a relevancy to the effective pertinent duty of the officer or body authorized to subpena and examine witnesses.

What may be relevant to the superintendent's function is to be seen by examining the frame of the statutory delegation to him. He is authorized in very broad language to conduct such investigations as he may deem necessary to determine whether any person or corporation has violated any of the provisions of the Banking Law, and 'to the extent necessary for this purpose' to examine relevant books, documents and records.

Page 360

(Banking Law, ยง 36, subd. 5.) The mechanics by which the process of subpena to effectuate this power is implemented are to be seen in section 38 of the same statute.

The essential argument of the petitioner is that the naked subpena on its face fails to show that the inquiry comes within the range of the superintendent's authority; that the petitioner not being a banking corporation and not being subject to the general powers of inspection or visitation of the superintendent and mere nominal John Doe form of the subpena not disclosing the actual nature of the inquiry, the jurisdiction of the superintendent to require compliance with the process is not established.

But the procedural facility employed by the petitioner to challenge respondent's jurisdiction by a motion at Special Term to vacate the subpena on the ground it was, in respect of the petitioner, beyond the power of the superintendent, gave opportunity to the respondent to show the court, in justification of its issuance, that it was within his power and that it was for a proper purpose within the language of subdivision 5 of section 36 of the Banking Law.

Such a motion to vacate is the 'adequate' and the 'proper remedy' by which the scope, propriety and authority of a public officer to issue a subpena is to be examined judicially. ( Carlisle v. Bennett,268 N.Y. 212, 218). There the plaintiff alleged that four broad subpoenas issued by the Attorney-General under the General Business Law (art. 23-A) were ...


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