Case ID: ad_149/html/0670-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Robert S. Smith, Appellant, v. Max Rubel, Respondent.
    First Department,
    March 22, 1912.
    Discovery — inspection of hooks of insolvent corporation—laches.
    The plaintiff in an action for damages resulting from false representations whereby the defendant, an individual, induced him to purchase stock of a corporation which subsequently became bankrupt, is entitled, on learning that the books of the corporation have come into the defendant’s hands, to inspect them in order to enable him to prove the facts as to which the fal$e representations were made.
    The examination should not be denied on the ground of laches although the motion therefor was not made until the case was about to be tried, if the plaintiff learned that the books were in the defendant’s possession only a few days before the motion and the defendant has not been prejudiced by the delay.
    Appeal by the plaintiff, Robert S. Smith, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 7th day of February, 1912, denying the plaintiff’s motion for a discovery and inspection of certain books.
    
      Harold Nathan, for the appellant.
    
      David C. Hirsch, for the respondent.
   Scott, J.:

The action is for damages for alleged false representations whereby, as it is said, defendant induced plaintiff to purchase stock in a corporation which has since become bankrupt. The allegations related to the condition of the corporation, the value of the assets and the book value of its stock. Since the bankruptcy the defendant has come into possession of the books of the corporation, and the plaintiff seeks to prove by them the true facts as to which, as it is said, the defendant made the false representations. The application was denied, as appears from the order, because of plaintiff’s laches based presumably on the fact that the application for inspection was not made until the cause was about to be tried. The defendant does not appear to have been prejudiced by the delay, and it affirmatively appears that plaintiff only learned that the books were in defendant’s possession two or three days before the motion was made. In so far as appears there was no reason why plaintiff should have assumed that the books had been delivered to defendant. The books are not defendant’s any more than they are plaintiff’s and we see no reason why plaintiff should not be allowed to inspect them before trial.

The order should be reversed, with ten dollars costs and disbursements, and motion granted.

Ingraham, P. J., Laughlin, Clarke and Miller, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted.