Case Name: Louis Cohen, Respondent, v. Morris H. Rothschild and Bernard E. Hyman, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1914-05-29
Citations: 162 A.D. 611
Docket Number: 
Parties: Louis Cohen, Respondent, v. Morris H. Rothschild and Bernard E. Hyman, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 162
Pages: 611–613

Head Matter:
Louis Cohen, Respondent, v. Morris H. Rothschild and Bernard E. Hyman, Appellants.
First Department,
May 29, 1914.
Practice — discovery — books and papers of brokers containing accounts with other customers — subpoena duces tecum.
A plaintiff suing brokers to recover moneys deposited for the purpose of speculating, through them, in buying and selling merchandise, who claims that the moneys have been used without his authority for transactions claimed to be fictitious or false, is not entitled to an order for a discovery and inspection of all the defendants’ books and papers relating to transactions made on behalf of the plaintiff, etc., where it appears that the books contain the accounts of many other customers, which are of a private and confidential nature.
It seems, that the production of the necessary papers should be compelled by a subpoena duces tecum in conjunction with an examination of the defendants, or their employees, before a referee appointed to try the issues.
Appeal by the defendants, Morris H. Rothschild and another, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 26th day of March, 1914, granting a discovery and inspection of the defendants’ books.
John R. Abney [Osmond K. Fraenkel with him on the brief], for the appellants.
Edward D. Brown, for the respondent.

Opinion:
Laughlin, J.:
This is an action by a customer against a firm of brokers to recover moneys deposited on opening an account for the purpose of speciilating in buying and selling cotton. He alleges that his brokers claim to have used the money without his authority in transactions for his account which he claims were fictitious or false. The issues arising on denials in the answer and a counterclaim, based on alleged accounts stated, with respect to the transactions which plaintiff now claims were unauthorized, and on a reply thereto, have been duly referred and are pending trial. If accounts with respect to these transactions were stated as claimed by defendants, then manifestly plaintiff could not recover. The learned counsel for defendants contends that if the accounts stated are established it will not be necessary to examine the accounts with respect to the transactions in question. That is doubtless true and it would seem to be a proper case for the trial of the issues with respect to the accounts stated first, but the record does not show any order therefor as authorized by sections 967 and 973 of the Code of Civil Procedure.
The plaintiff, on a petition and an affidavit tending to show that some of the transactions which the defendants claim to have had on his account were fictitious, and that all or nearly all were made by the defendants without authority from the plaintiff, obtained an order, pursuant to the provisions of section 803 of the Code of Civil Procedure, requiring the defendants to produce before the referee to whom the issues have been referred "all purchase and sales books, street contractor cotton contract books, journals, ledgers, contract slips, the black memorandum book kept by the defendant Rothschild of his personal trades on the New York Cotton Exchange, and all other books, papers and documents belonging to and kept on behalf of the defendants between the 20th day of October, 1911, and the 28th day of August, 1913, containing entries in reference to contracts alleged to have been made by the defendants on behalf of the plaintiff on the New York Cotton Exchange, and all entries in reference to contracts used in offsetting and settling alleged contracts made on behalf of the plaintiff, and also all entries in reference to purchases and sales made by the defendants or either of them during the said period, and also all entries in said black memorandum book aforesaid during said period," and permitting the plaintiff and his attorneys and accountants "to examine said books, papers and documents and to make copies therefrom in so far as they relate to the transactions between the plaintiff and defendants directly or indirectly, " and providing that the inspection, examination and discovery and the taking of copies of said entries Phan be "subject to the direction and control of said referee."
We are of opinion that an inspection and discovery is quite unnecessary, at least at this time, and that it would disclose information concerning the business of other customers of defendants in no manner involved in or germane to this litigation and which is of a private and confidential nature. It would seem that a subpoena duces tecum for the production of these books and papers and an examination of the defendants or their bookkeeper or other employees, before the referee and under his supervision, with respect thereto, would elicit all the information to which the plaintiff is legitimately entitled, and plaintiff should be left to adopt that course. Of course, it is wholly immaterial to the plaintiff what entries the books of the defendants contain, if, as he claims, he authorized no purchase or sale; and if he did authorize any transactions, those only concern him; and it would seem that by such examination they may be so identified that the examination of defendants' books and papers and the use thereof as evidence may be confined thereto; but if not, the application for an inspection and discovery may be renewed.
It follows that the order should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
Ingraham, P. J., Clarke, Scott and Dowling, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.