Case Name: Fred L. Goodman and Others, Respondents, v. Ignatz Roth, Appellant, Impleaded with William A. Goodman, Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-12-30
Citations: 135 A.D. 515
Docket Number: 
Parties: Fred L. Goodman and Others, Respondents, v. Ignatz Roth, Appellant, Impleaded with William A. Goodman, Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 135
Pages: 515–517

Head Matter:
Fred L. Goodman and Others, Respondents, v. Ignatz Roth, Appellant, Impleaded with William A. Goodman, Defendant.
First Department,
December 30, 1909.
Accounting — court should determine issues raised by pleadings — reference premature.
Where the plaintiff, suing for an accounting of assets transferred to the defendant, alleges that the latter converted to his own use an interest in a patented process, which is denied, it is improper to enter an interlocutory judgment for an accounting and to authorize the referee to determine that issue. The court, in the first instance, should determine issués which affected the scope of an, accounting, and then direct the referee to take the account within the lines laid down by tne court.
Appeal by the defendant, Ignatz Roth, from an interlocutory judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Hew York on the 10tli day of August, 1909, pursuant to an order made at the Hew York Special Term and entered in said clerk’s office on the 9tli day of August, 1909, referring the issues to a referee, and also, from the said order directing the entry of such interlocutory judgment.
I. Gainsburg, for the appellant.
Pang don P. Marvin, for the respondents. '

Opinion:
Scott, J.:
. This is an appeal from an order granted on the pleadings, and an interlocutory judgment for an accounting.
The complaint shows, and it is not denied, that plaintiffs assigned all their stock of merchandise and outstanding accounts to appellant to the end that he should settle their financial difficulties, and that he had disposed of the property thus transferred. It is not. questioned that an account of these transactions is proper. It is further alleged . in the complaint that among the assets so transferred was a half interest in a certain patented process and a license to use the same, and that appellant has disposed of the same to his own profit. The defendant denies so much' of the complaint in this regard as charges him with liability to account for the proceeds of the use of the, patent and license. These denials raise an issue of fact which must be decided before an account of such proceeds can be required. The interlocutory judgment appoints a referee to take and state the defendant's accounts, and then contains this clause: " Ordered and adjudged that all further issues in this action, including all matters relating to. the scope of the aforesaid accounting, be and the same hereby are referred to said referee to hear and determine the same." • '
The apparent purpose of this clause-is to refer to. the referee the question whether or not the appellant is required to account for the matters concerning which he denies his liability to. account. So much of the judgment was .unauthorized. It is the duty of the court, in the first instance, to determine the issues affecting the scope of the accounting, and send to a referee only the duty of taking the account within the lines laid down by the court. There is nothing to show that the issue whether or not appellant can be required to account for the proceeds of the patented process and license is one which cannot properly and conveniently be tried by the court, although doubtless if such an accounting should be ordered it may require the assistance of a referee.
The order and judgment appealed from must, therefore, be reversed, with costs and disbursements, and the action remitted to the Special Term for appropriate action.
Ingraham, McLaughlin, Laughlin and Houghton, JJ., concurred.
Judgment and order reversed, with costs, and case remitted to Special Term as stated in opinion. Settle order on notice.