Gould Roofing Co. v. Gilldea , 38 N.Y.S. 915 ( 1896 )

O’Brien, J.:

The defendants, with one Gould, were engaged in -business under the style of the Elmira Roofing Company from September 4, 1891, to October 23, 1894. The single question presented upon this appeal is as to whether the limitation of time during which an inspection was allowed' was proper, or, differently expressed, whether, in addition to the permission granted plaintiff to make an examination for a period subsequent to November 28, 1892, the order should not include the year and three months prior to that date.

The defendants, -in their offer to allow an inspection, fixed no such limitation as was made by the order, but insisted that the books should not be removed from Elmira, where they were needed,, and . that the examination should be had at that place. It will, therefore, be noticed that the question before the Special Term was the place of examination, and not its scope. The plaintiff, having purchased the interest of Gould in the Elmira Roofing Company, had the same rights as Gould himself, which concededly entitled -the latter to one-third of the profits of the business, and, for the purpose of ascertaining what such profits were, an inspection of the books and papers.

The limitation upon the scope of the examination was undoubtedly the result of a statement in the answering affidavits which incorporated an assignment to one Lee H. Gould, by which Gould had assigned “ all moneys that may be due and owing to me under said contract at the end of this present quarter, which will be on the 28th of this present month. Dated November 19, 1892.” It is not claimed that this, assignment was known to plaintiff at the time of the purchase from Gould and defendants, nor do defendants allege any acceptance, ratification or payment by them under it. To hold that such an assignment was valid would be, in effect, to determine on this point adversely to plaintiff in advance of the trial. It will be noted that, at best, it is but a defense to a portion of the plaintiff’s claim, which, like the other defenses, will be disposed of upon the trial; and its suggestion upon the motion is no more reason for limiting the scope of the examination than would be the denial of a right of discovery because other defenses going to the whole cause of action were pleaded which, if maintained upon the trial, would defeat the plaintiff’s right to any relief. The plaintiff’s claim, therefore, being for the interest of Gould, which, as a partner or employee, it is conceded, was a one-third interest in the profits from the commencement of the business, the plaintiff would be entitled to have such interest- ascertained for the entire period, unless in the first instance upon the trial the assignment referred to should be successfully established as a bar to any relief prior to November 28, 1892. We cannot, however, anticipate the order or method of the trial, and the validity and extent of this assignment may not fully appear until the defendants are permitted to introduce their "evidence to establish their defenses, among others, that relating to this assignment. It is, therefore, as important for the plaintiff to be in- a position to establish its entire cause of action as any part thereof, and it should not be prevented' from obtaining the evidence for that purpose or having before the court the facts which, if the validity of the assignment is successfully assailed, will entitle the plaintiff to the full relief demanded.

It being conceded by the defendants and by the learned judge at Special Term that a discovery was proper, we do not think that sufficient reason appears for limiting it, and, therefore, the scope of the order should be extended so as to include the entire period.

So much of the order apjiealed from as refuses plaintiff jiermission to examine the books and papers of the defendants prior to November 28, 1892, is reversed, and the motion granted so as to permit the ■ examination of such books and papers for the year and three months preceding that date. Order modified accordingly, with ten dollars costs and disbursements to the appellant.

Van Brunt, P. J., Williams, Patterson and Ingraham, JJ., concurred.

So much of the order appealed from as refuses plaintiff permission to- examine- the books and -papers ■ of the defendant prior to November 28, 1892, reversed, and the motion granted so as to permit the examination of such books and papers for the year and three months preceding that date. Order modified accordingly, with ten dollars costs and disbursements to the appellant.