Case Name: Annie P. Livingston, executrix, etc., agt. Asa Curtis
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1877-10
Citations: 54 How. Pr. 370
Docket Number: 
Parties: Annie P. Livingston, executrix, etc., agt. Asa Curtis.
Judges: 
Reporter: Howard's Practice Reports
Volume: 54
Pages: 370–375

Head Matter:
SUPREME COURT.
Annie P. Livingston, executrix, etc., agt. Asa Curtis.
Discovery and inspection of partnership books — Action for an accounting by executrix—examination of defendant.
In an action for an accounting, brought by an executrix of her deceased husband, who, previous to his death, was a partner of the defendant, the plaintiff is entitled to an inspection of the books of the firm for the purpose of enabling her to frame her complaint.
Up to a few months previous to his decease, the husband of plaintiff was a copartner with the defendant. A settlement was had with him while he was in a feeble condition, in which he afterwards informed plaintiff that, at least, one important credit had been omitted. The action is brought by plaintiff, as executrix of her deceased husband, to correct that settlement. For the purpose of entitling herself to an order for the examination of the partnership books, she showed that the settlement with her husband, and the sale of his interest to the defendant, took place when his health was feeble, and on that account was unable to devote critical attention to the business transacted.
Held, that the facts set forth by plaintiff, if established, would constitute a cause of action, and were sufficient to bring her application for the discovery within the provisions made by the established rules of the supreme court, which allow the order for the purpose of enabling a plaintiff to frame his complaint (Bule 18, sub 1). (This decision is adverse to Platt agt. Platt, 11 Abb. [Y S.], 110.)
It seems that the same state of facts would entitle the plaintiff to an examination of the defendant, on oath, for the purpose of obtaining the facts on which to frame a complaint.
First Department, General Term, October, 1877.
Davis, P. J., Beady and Daniels, JJ.
Appeal from order denying application for a discovery of partnership books, and from an order denying an application for the examination of the defendants. The plaintiff was the widow and executrix of Mr. Philip Livingston, deceased, who during his life was a partner of the defendant. During the last year of this partnership Mr. Livingston had been too ill to leave his house or give any attention to business, and consequently the defendant had exclusively managed and controlled the same. Just previous to Mr. Livingston’s death, and in anticipation thereof, the defendant had an interview with him which resulted in a settlement, or as defendant alleges, in the dissolution of the firm, and a written transfer of Mr. Livingston’s interest in the business to defendant. This written instrument defendant has failed to produce. Shortly after this alleged transfer and settlement which happened while Mr. Livingston was in a dying condition, he told his wife that Mr. Curtis, the defendant, had omitted to give him credit for $3,000 rent, and also for his interest in profit and loss account. After Mr. Livingston’s death, his wife who was his executrix, called Mr. Curtis’ attention to these dying declarations of her husband and asked an explanation, Mr. Curtis has evaded her request and has declined either to exhibit the partnership books or to give any explanation. Whereupon plaintiff began this action for an accounting and obtained an order to compel defendant to exhibit the partnership books so as to enable her to frame a complaint. This order was vacated, and she appeals. After this order was vacated, she made a new application based upon the facts set forth in her former petition with the addition of other facts which she obtained from defendants’ opposing affidavit, and obtained an order to examine defendant under section 391 of the Code. This order was also vacated, and she appeals from this order also.
Adolphus D. Pape, for appellant.
Plaintiff is entitled to both remedies (Smith agt. McDonald, 52 How., 117). The plaintiff is entitled to either or both remedies sought, on showing the existence of the following facts: First, The exist ence of a cause of action; second, The nature of that action ; third, The particular facts sought to be elicited; fourth, The materiality and necessity of these facts to enable her to properly construct her complaint and maintain her action; and fifth, That these particular facts are within the exclusive reach and knowledge of defendant, and are not within the reach and knowledge of petitioner (Glenney agt. Stedwell, 51 How., 329; S. C., 64 N. Y., 120; Shepmoes agt. Bowson, 52 How., 401). Plaintiff succeeds to all .the rights of her husband the late partner of defendant (Kelly agt. Eckford, 5 Paige, 548; Pegram agt. Carson, 10 Abb., 341, note; Meignell agt. C. B. N. Co., 7 Robt., 77). The discovery is indispensable to enable her to frame her complaint, and is not attainable by competent and available testimony, other than that of defendant, and she is, therefore, .entitled to the relief prayed for (Woods agt. De Figanirre, 25 How., 522; Low agt. Graydon, 14 Abb., 443; Pegram agt. Carson, 10 Abb., 340). The examination and discovery cannot be evaded by averring that the plaintiff has no cause of action, and that the partnership books contain no evidence or entries bearing upon his relations with Philip Livingston, when the latter was his partner. The books themselves are the best evidence (Shepmoes agt. Bowson, 52 How., page 405 and cases cited; Bailey agt. Dean, 5 Barb., 297; McIntyre agt. Marcius, 16 Johns., 592).
Stephen A. Walker, for respondent.
The orders are not appealable. A party against whom an order for inspection is made may appeal (Thompson agt. Erie R. Co., 9 Abb. [N. S.], 233). But the refusal of such an application is not an invasion of any substantial right. The application for a general inspection of books by one member of a partnership after its dissolution will not be granted Platt agt. Platt, 11 Abb. [N. S.], 110), An order for inspection is not granted in chancery, under the Revised Statutes or under the Code, merely to discover whether there is a cause of action, but only to substantiate one known to exist (Jackling agt. Edmunds, 3 E. D. Smith, 548; Hoyt agt. Am. Ex. Bank, 1 Duer, 652; Commercial Bk. agt. Dunham, 13 How., 541; see note to 1 Abb. [N. C.], 335; Glenny agt. Stedwell, 51 How., 319; Elmore agt Hyde, 2 Abb., [N. C.], 135). It is the uniform practice in the first district to refuse application to compel production of books and papers on the examination of a party before trial (Hauseman agt. Sterling, 61 Barb., 347). Glenny agt. Stedwell (supra), holds that a plaintiff may have an examination for the purpose of enabling him to frame a complaint, only, where equity would have sustained a bill of discovery.

Opinion:
Daniels, J.
The applications made were supported by peculiar circumstances. The plaintiff is the executrix of her deceased husband, who, up to a few months previous to his decease, was a copartner with the defendant. A settlement was had with him while he was in a feeble condition, in which he afterward informed the plaintiff that at least one important credit had been omitted. And she, believing the information to be correct, after being denied the opportunity to have the books of the firm examined in order to test the accuracy of her information on the subject, brought this action to correct the settlement. JFor the purpose of entitling herself to an order allowing the partnership books to be examined, she showed that the settlement with her husband and the sale of his interest to the defendant, took place when his health was feeble, and on that account was unable to devote critical attention to the business transacted. He was, for that reason, peculiarly liable to be mistaken, and under the circumstances exceedingly apt to rely upon any assurances which might be given to him, and the persistent opposition of the defendant to an examination of the books and accounts of the firm has a direct tendency to support the conclusion that some mistake of the nature of that alleged had intervened in the settlement that was made. The defendant denied that such .was the case, and may be entirely accurate in that denial. But it is not the object of the law to sanction the trial of these disputes upon the conflicting affidavits of the parties. Another mode has been provided for that purpose in which the facts are to be exhibited upon which the conclusions must be placed by a disinterested tribunal.
The facts set forth by the plaintiff, if established, would constitute a cause of action. And she believes they can be established by an examination of the partnership books. To them and the memory of the defendant she desires to appeal for evidence to support her claim and enable her to frame her complaint with a degree of particularity required by the practice of the courts. Without the inspection she has shown her inability to do that, and if that is denied her the action contemplated and already begun, must necessarily fail. These facts were sufficient to bring her application for the discovery within the provisions made by the established rules of this court upon this subject. The authorities relied upon by the defendant's counsel do not require or justify a denial of that application. The only one directly opposed to it is that of Platt agt. Platt (11 Abb. [N. S.], 110), in which it seems to have been held, under circumstances somewhat similar to those now presented, that the examination of the books can only be had after judgment. Such an examination can be of no practical benefit to the plaintiff, and the authority is in direct conflict with the rules of the court, which allow it to be ordered for the purpose of enabling the plaintiff to frame her complaint (Rule 18, sub. 1).
The order denying the application for an inspection and examination of the partnership books should be reversed and an order directed requiring the books and papers of the firm to be produced and subjected to such inspection and examination for such a period of time as will enable the plaintiff to have them thoroughly examined by any competent person selected by her for that purpose.
While that may be proceeding, no necessity for the examination of the defendant appears to exist. After it has been had, that may become manifestly proper. For that reason the order denying the application should be so far modified as to permit its renewal hereafter, if that shall prove to be necessary.