Case Name: Howard Caldwell and Warren E. Owens, Plaintiffs, v. J. Walter Labaree and James C. Peabody, Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1903-05
Citations: 40 Misc. 564
Docket Number: 
Parties: Howard Caldwell and Warren E. Owens, Plaintiffs, v. J. Walter Labaree and James C. Peabody, Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 40
Pages: 564–566

Head Matter:
Howard Caldwell and Warren E. Owens, Plaintiffs, v. J. Walter Labaree and James C. Peabody, Defendants.
(Supreme Court, New York Special Term,
May, 1903.)
Examination before trial — As to alleged fictitious sales of stock.
Where customers of stock brokers sue them to surcharge their accounts rendered, as containing items representing fictitious transactions, and the said accounts do not show who the buyers and sellers were and the moving papers of the customers allege that the information cannot be obtained except from the stock brokers, the customers are entitled to examine them before trial upon.this material point as otherwise the customers could not refute any statement which the stock brokers might make on the trial in regard to the pretended purchases and sales.
Motion to vacate an order for the examination of the defendants before trial.
Black, Olcott, Gruber & Bonynge (Abraham Gruber, of counsel), for motion.
Goldsborough, Villard & Warner (Henry W. Hardon and Harold G. Villard, of counsel), opposed.

Opinion:
Giegerich, J.
The action is brought by customers against stock brokers to surcharge accounts rendered, it being alleged that certain items are false and fraudulent, and that the pretended 'transactions so set forth are fictitious. The accounts rendered fail to show the names of the buyers or sellers with whom the defendants claim to have had the alleged transactions, and it is stated in the moving papers that the plaintiffs have no means of learning who snch pretended buyers and sellers were except by the examina^ tion of the defendants, and that such examination before trial is material and necessary. The motion to vacate the order is based upon the sole ground that it is not shown in the moving affidavits that it is necessary or important for the plaintiffs to have such examination before the trial, but that, on the contrary, for aught that appears, an examination at the trial will answer every purpose as well as would one in advance. In support of this contention Williams v. Folsom, 54 Hun, 308; Hay v. Zeiger, 50 App. Div. 462, and Jenkins v. Putnam, 106 N. Y. 272, are relied upon. In none of those cases does it appear that there was any necessity for obtaining the information desired prior to the trial. In fact, the difference between those cases and cases like the present was pointed out in one of those authorities (Williams v. Folsom), where it was said: " The cases of Miller v. Kent, 59 How. Pr. 321; Judah v. Lane, 12 N. Y. St. R. 131; Dyett v. Seymour, 19 id. 765, and Frothingham v. Broadway, etc., R. R., 9 Civ. Pro. 304, are entirely distinguishable from the application which was made for this order, for in each of them it was made to appear that a knowledge of facts, which could only be obtained by the examination of the opposite parties, was essential to enable the plaintiffs to proceed with the prosecution of the action. They were facts, too, of such a description as were required to be known before the trial itself, while here no necessity whatever exists or has been shown for obtaining the evidence of the defendants prior-to the trial of the actionand also, " it nowhere appears that the-proper prosecution of the plaintiff's action will be in any manner-dependent upon their ability to obtain the examination of the de-fendants before the trial itself shall actually take place." In the-present instance this does appear. The issue is whether or not the-alleged purchases and sales took place. The plaintiffs have no means, except by examination of the defendants, of discovering with whom the latter will claim these alleged transactions were had, and if this information is not afforded them until the day of the trial it is obvious that they cannot be in any position to refute any statement the defendants may see fit to make. It might further be observed that two of the cases distinguished in Williams v. Folsom, supra, viz., Judah v. Lane, and Dyett v. Seymour, were, like this, actions by customers against stock brokers for alleged false accounts of purchasers and sales, and in both the examination before trial was permitted. Talbot v. Doran & Wright Co., 16 Daly, 174, and Drake v. Weinman & Co., 12 Misc. Rep. 65, were also cases of the same character, where the same ruling was made. The motion should be denied, with ten dollars costs.
Motion denied, with ten dollars costs.