not aware of any authority for this distinction. If the complainant has been guilty of laches, a court of equity will not look into the transaction at all. It will refuse its aid upon the ground that nothing can call it into activity but conscience, good faith, and reasonable diligence. These wanting, the court will remain passive and do nothing. It will not inquire whether the transaction complained of was void or voidable. It will leave the parties where it finds them. The conclusion already reached renders it unnecessary to consider the defense of the statute of limitations proper. There is, however, one view of the statute which, if adopted, would require us to hold the present suit barred, independently of the question whether there was concealed fraud.

The Missouri statute provides that actions for relief on the ground of fraud shall be commenced within five years from the time when the cause of action accrues, "the cause of action in such case to be deemed not to have accrued until the discovery by the aggrieved party, at any time within ten years, of the facts constituting the fraud.' St. Mo. 1879, § 3230.

This statute, by its terms, requires the injured party, at his peril, to discover the fraud within 10 years. According to the allegations of the bill, the alleged fraud in this case was not discovered until after the expiration of 10 years. The allegation is that the fraud was discovered within the year preceding the filing of the bill, which would fix the time of discovery more than 12 years after the consolidation. We are not aware that this provision of the statute has ever been construed by the supreme court of this state, but it was discussed by this court in Martin v. Smith, supra, and the conclusion was reached that its effect is to bar a suit for relief on the ground of fraud, where the fraud is discovered after the expiration of 10 years. While this court would not be inclined to adopt and follow a state statute of limitations which make no exception with respect to cases of concealed fraud, we should feel bound to adopt and follow the statute in question upon the ground that it grants a reasonable time within which the discovery shall be made. The highest interests of society demand that there should at some time be an end of litigation, and the statute in question was doubtless enacted in view of this demand, and to prevent the prosecution of state claims. Without the limitation which this statute contains, it has often happened that suits on the ground of concealed fraud have been brought many years after the transactions, upon the ground of recent discovery, and courts have felt constrained to entertain them, notwithstanding, by reason of the lapse of time, witnesses may have died, papers and proofs been lost or destroyed, and the rights of innocent. third parties become involved. In the light of experience we cannot say that the statute in question, giving 10 years and no more in which to make the discovery, is not reasonable and just. We think it is one which a federal court of equity, sitting within the state of Mis

souri, should adopt and follow, and upon this ground we should feel bound to hold the present suit completely barred, independently of the other questions discussed in this opinion.

As the defenses of laches and the statute of limitations must be sustained, it would be a waste of time and labor to examine the other questions discussed by counsel at the bar, and therefore, without considering them, we overrule the exceptions to the answer.

KREKEL, J., concurs.

TRUSSELL v. SCARLETT, trading as R. G. DUN & Co.

(Circuit Court, D. Maryland. November Term, 1882.)

1. EVIDENCE-PRIVILEGED COMMUNICATION.

When objection is made to the admissibility of a paper offered in evidence, upon the ground that it is a privileged communication, it is proper for the court, before permitting said paper to be read to the jury, to allow the party objecting to cross-examine the witness producing it, and also to receive other evidence upon the question of its privileged character, in order to decide as to its admissibility.

2. SAME-LIBEL-MERCANTILE AGENCY.

When a mercantile agency makes a communication to one of its subscribers who has an interest in knowing it, concerning the financial condition of another person, and when such communication is made in good faith, and under circumstances of reasonable caution as to its being confidential, it is a protected privileged communication, and an action for libel cannot be founded upon it, even though the information given thereby was not true in fact, and though the words themselves are libelous.

This was an action for libel, tried December 5, 1882, in the circuit court of the United States for the district of Maryland, before Hon. THOMAS J. MORRIS, district judge, and a jury.

The declaration alleged that the plaintiff was a general merchant, conducting a wholesale and retail business at Charlestown, West Virginia, etc., and that the defendants, together with Robert G. Dun, being then engaged in carrying on the business known as a mercantile agency in the principal cities of the United States, etc., under the style of R. G. Dun & Co., on the eleventh day of July, 1881, at the city of Baltimore, wrongfully, injuriously, and maliciously composed and published, etc., a certain false, scandalous, malicious, and defamatory libel of and concerning the plaintiff, and of and concerning him, in his said business, etc., containing the words following; that is to say: "Trussell, C. W., Charlestown, Jefferson Co., W. Va., D. G., etc., July 11, '81, has made an assignment for the benefit of his creditors. No particulars known as yet;"-thereby meaning that the plaintiff had utterly failed in his said business and was unable to carry on the same, and to pay his just debts in their usual and regular course, and was insolvent. The declaration alleged special damage, and claimed $10,000 damages. Plea, not guilty.

The plaintiff, after proving that on June 11, 1881, he was engaged in business as alleged in the declaration, and had good credit, called as a witness William Devries, who testified that about June 11, 1881, he received from the defendants' office in Baltimore a paper, of which he produced a copy, (the original having been destroyed,) and that such papers, inclosed in an envelope, were usually delivered at witness' office by a boy in the employ of defendant, who took a receipt for them. The plaintiff then offered said paper in evidence, but the defendants' counsel contended that before it could be read to the jury they had a right to cross-examine the witness in order to show that it was a privileged communication and therefore inadmissible; citing Maurice v. Worden, 54 Md. 251, in which it was held that where the plaintiff offered in evidence a paper, to the introduction of which the defendant made objection upon the ground that it was a privileged communication, the court properly received evidence to show its privileged character before permitting it to be read.

Marshall & West, for plaintiff.

Wm. Reynolds, C. J. Bonaparte, and Saml. Wagner, for defendants. MORRIS, J. It does seem to me a very much better way of conducting the trial that it should be ascertained first whether there is any ground for the action, otherwise, if it should turn out that the paper offered in evidence was a privileged communication, we may get into a very long controversy, which may be obviated at this stage of the proceedings.

The witness then, upon cross-examination by the defendant, further testified that the firm of William Devries & Co., of which he was a partner, was, at the time of receiving said paper, and had been for a number of years before, a subscriber to the mercantile agency of the defendants; that when they first credited plaintiff, which was probably soon after the close of the war, they made an inquiry of R. G. Dun & Co.; that they were apt to make one twice a year,—every six months, may have made half a dozen during the year; that this paper, or a similar one, came to their office giving this information. Witness, upon being shown a ticket addressed to R. G. Dun & Co., asking information in regard to plaintiff, and dated June 16, 1881, identified it as having come from his office, and upon being asked whether the paper received by him was not in answer to the inquiry contained in said ticket, replied:

"I don't know. I should infer it was. We make inquiries every day in the week. We have an understanding with R. G. Dun & Co. that if anything occurs to any of our customers they are to immediately inform us."

(The defendants' counsel then asked the court to exclude the paper offered in evidence by the plaintiff, and the question was fully argued.) Morris, J. If a merchant having an interest in knowing the financial standing of another merchant, whom he proposes to deal with, goes to another, and asks him with regard to that person's financial standing, and he honestly answers him what he knows about

the person inquired of, even if it should turn out to be false, I think it is a privileged communication, upon which an action cannot be founded, even though the words themselves are libelous. If he says, "I have looked into his affiairs, I have informed myself with regard to them for my own benefit, and I believe him to be insolvent," I do not think that such a communication, if made in good faith, is one upon which an action can be founded. The doctrine of the case of White v. Nichols, 3 How. 266, it seems to me, has been again and again held to cover communications made between merchants with regard to the standing of traders, where the party making the inquiry had an interest, and where the party answering the inquiry answered it in good faith. It is conceded in this case that the plaintiff cannot show any want of good faith, and the only question that remains. open is whether that doctrine is applicable to a person in the situation of the defendant in this case. It was held in Beardsley v. Tappan, 5 Blatchf. 497, that it was not. That was a case decided some years ago, at a time when companies or corporations, formed for the purpose of collecting information for the benefit of merchants, were very little known. It has never been sanctioned in any higher court; the contrary has been decided in the highest courts of New York and other states, and the contrary was also held in a well-considered opinion by Judge CALDWELL, in the circuit court of the United States. for the eastern district of Arkansas, (Erber v. Dun, 12 FED. REP. 526,) covering the facts of this case. If it is permissible for one merchant to inquire of another for his own benefit as to the standing of another merchant, I cannot see how any distinction can be made where one expends money and another receives money for the information, and makes it his business to get the information. The only question, then, is, was this communication, which is offered in evidence here, and which I hold to be a privileged communication, made to William Devries & Co. under circumstances which keep it within the protection of privileged communications; that is, was it made under circumstances of reasonable caution as to its being confidential? It appears from the evidence that it was intended to be a confidential communication; that the agreement and contract between the defendant and Devries & Co. was that it was to be kept to themselves and not disclosed to others; and that it was made to them because they had an interest in knowing the financial situation of the plaintiff. It is, in my opinion, a protected privileged communication, and I therefore exclude the evidence.

The plaintiff took a nonsuit.

The first point made in the case before us is in harmony with many rulings on the subject of admissibility. When the admissibility of either a witness or a document is in question, the party opposing the admissibility is entitled, as a preliminary test, to cross-examine on this specific issue the witnesses on

whose testimony the admissibility depends. No document or witness, such is the fundamental principle, is self-prooving. We must fall back, as a basis logically necessary in all cases, on parol proof; and this proof only is effective when exposed to the criticism of cross-examination. This is illustrated by the old practice of examination on voir dire. When a witness, in old times, as to whose competency there was any question, was called, he was sworn, not to "tell the truth, the whole truth, and nothing but the truth," but "true answers to make to such questions as should be put to him." These questions related solely to his competency; and the burden of this preliminary examination fell upon the party objecting to competency. In fact, the old practice was, when there was an objection to competency, for the objecting counsel to ask for the administering of the voir dire oath, which was granted as a matter of course. The objecting counsel then proceeded to inquire as to the witness' interest in the case, or other ground of incompetency; the party sustaining the admissibility being then entitled to examine in reply.1 The same distinction is taken with regard to the proof of lost documents. A witness called to prove the contents of a lost document, after his examination by the party calling him on the subject of the loss, and of his knowledge of the document, is open to cross-examination by the opposing counsel; and it is not until the witness has been thus fully probed, and his knowledge on this specific issue drawn out, that the document is received in evidence.2 If it should appear, upon cross-examination, that the witness was not the custodian of the paper, or was not personally familiar with the fact or nature of its custody, this is decisive against admissibility, unless witnesses who can prove such custody, and can in this way account for the loss of the paper, are produced. So is it when a witness declines to answer on the ground of self-crimination. This is a prerogative which is almost always set up on cross-examination; but at whatever stage of a case a witness declines to answer on this ground, after he states his objection, counsel on both sides are entitled to examine him as to the extent to which the objection is interposed. The examination must show, to the satisfaction of the court, that the danger to which the witness would be exposed by answering is real and substantial, or else the witness will be compelled to answer.5 The same line is taken when other phases of privilege are set up by a witness. This is the case where an attorney sets up professional privilege; where a particular fact sought to be proved is alleged to have been the subject-matter of a confidential communication between a party to a suit and his witnesses; 7 where arbitrators or jurors are examined as to the grounds of their award or finding; and where public officers are asked as to state secrets. Hence the ruling in the case in the text is in conformity with the analogies in kindred cases of privilege.

6

The point as to the liability of mercantile agencies for libel in case of an

1 R. v. Gisburn, 15 East, 57; Quarterman v. Cox, 8 C. &. P. 97; Brockbank v. Anderson, 7 M. & Gr. 295; Fifield v. Smith. 21 Me. 383: Walker v. Sawyer, 13 N. H. 191; Bridge v. Wellington, 1 Mass. 219; Foley v. Mason, 6 Md. 37; Wright v. Mathews, 2 Blackf, 187; Herndon v. Givens, 16 Ala. 261.

2 See Fisher v. Samuda, 1 Camp. 13; Clark v. Houghton, 12 Gray, 38; Richardson v. Robbins, 124 Mass. 105; Coxe v. England, 65 Pa. St. 212; Rankin v. Crowe, 19 Ill. 626.

3 Hart v. Hart, 1 Hare, 1; R. v. Piddlehinton, 3 B. & Ad. 460; R. v. Hinckley, 3 B. & S. 885; Richards v. Lewis, 11 C. B. 1035; Plaxton v. Dare, 10 B. & C. 17.

4 See Cates v. Hardacre, 3 Taunt. 424; Chestler v. Wortley, 7 C. B. 410; Schofield, Ex parte, L. R.

6 Ch. D. 230; Low v. Mitchell, 18 Me. 372; Coburn v. Odell, 30 N. H. 340; Brown v. Brown, 5 Mass. 320; People v. Kelly, 24 N. Y. 74.

5 Osborn v. Dock Co. 10 Exch. 693; Fernandez, Ex parte, 10 C. B. (N.S.) 329; Grannis v. Brandon, 5 Day, 260; People v. Mather, 4 Wend. 229; Ward v. State, 2 Mo. 98; Floyd v. State, 7 Tex. 215. 6 See Greenough v. Gaskell, 1 M. & R. 98. 7 Ross v. Gibbs, L. R. 8 Eq. 522; Hamilton v. Nott, L. R. 16 Eq. 112.

8 Johnson v. Durant, 4 C. & P. 327; Bucclengt v. Board of Works, L. R. 3 Ex. 306; R. v. Rosser, 7 C. & P. 648; Howser v. Com. 51 Pa. St. 332.

9 Plunkett v. Cobbett, 5 Esp. 136; Chubb v. Salomons, 3 C. & K. 75; Hartranft's App. E Pa. St. 433.