Case Name: Associated Lozier Purchasers, Inc., Respondent, v. Harry S. Houpt, Inc., Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1916-05-05
Citations: 172 A.D. 650
Docket Number: 
Parties: Associated Lozier Purchasers, Inc., Respondent, v. Harry S. Houpt, Inc., Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 172
Pages: 650–653

Head Matter:
Associated Lozier Purchasers, Inc., Respondent, v. Harry S. Houpt, Inc., Appellant.
First Department,
May 5, 1916.
Discovery — accounts between principal and agent—no discovery of books and papers of other agent not party to action.
A plaintiff suing a corporation for an accounting as to transactions between the defendant, as agent, and its principal, a bankrupt corporation, the rights of which were purchased by the plaintiff from the trustee in bankruptcy, is not entitled to an order for an examination of the books and accounts of an individual, not made defendant, who is alleged to have had a similar agency with the bankrupt principal, there being nothing to show that the defendant corporation assumed the obligations of the other agent. This because such discovery is not material to any cause of action which the plaintiff may have against the defendant.
Appeal by the defendant, Harry S. Houpt, Inc., 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 6th day of March, 1916, requiring it to give plaintiff a discovery and inspection of specified books, papers and records relating to transactions between the Lozier Motor Company and the defendant under and by virtue of agreements between them during the years 1913, 1914 and 1915, covering both New York and Philadelphia branch offices of the defendant.
Selden Bacon [Saul 8. Myers with him on the brief], for the appellant.
Leo N. Haiblum, for the respondent.

Opinion:
Laughlin, J.:
The petition upon which the order was granted shows that on or about the 14th day of May, 1913, a contract was made between the Lozier Motor Company and Harry S. Houpt individually, whereby it granted to him the right to sell Lozier automobiles in certain specified territory, which territory was extended by a subsequent agreement; that the Lozier Motor Company thereby agreed to place a stock of Lozier automobiles and of repair parts on consignment with Houpt, and to make additions thereto from time to time, the title to remain in it until sold, and Houpt agreed to make monthly reports of sales and to deposit moneys received on sales to the credit of the consignor, and to remit therefor, less specified commissions, monthly, and to keep true and accurate accounts of the consigned goods, which accounts should at all times during regular business hours be open to the inspection of the consignor; that during the year 1914 the Lozier Motor Company entered into á separate agreement with the defendant " which upon information and belief was under the same terms and conditions as were contained in the agreement had between the Lozier Motor Company and Harry S. Houpt," with certain exceptions not material to the question now before the court; that the agreement with the defendant was to continue for two years; that the petitioner was unable to state fully the terms of the agreement with the defendant, but alleged upon information and belief that the Lozier Motor Company consigned to the defendant a large number of automobiles and repair parts and the defendant has failed to turn over to it or to the plaintiff " all the moneys received " by it " on behalf of the plaintiff herein; " that the Lozier Motor Company was adjudicated a bankrupt, and on the 5th day of February, 1915, the plaintiff purchased from the trustee in bankruptcy all of its assets, including said agreements between it and Houpt and the defendant; that Houpt has failed to turn over the moneys received by him from sales of repair parts and motor cars consigned to him, and a large amount remains due and owing from him to the plaintiff on account thereof; that in order properly to frame a complaint, it is necessary for the plaintiff "to have a discovery of all the contracts, books, ledgers, journals, inventories, statements, check books and check stub books, kept by the said Harry S. Houpt in which the course of transactions between the Lozier Motor Company and the said Harry S. Houpt are fully set forth both in the New York and Philadelphia accounts; " that said books, papers and documents are in the possession or under the control of the defendant, and that the evidence contained' therein is material and indispensable to the plaintiff to enable it to frame a complaint, as its entire cause of action " is based upon the data contained in said books and unless discovery is granted, this plaintiff is left remediless and without a cause of action; " and that the plaintiff has no knowledge of the contents of the books, papers and documents and no other means of obtaining knowledge thereof.
The record contains what purports to be an agreement between Houpt individually and the Lozier Motor Company under date of May 14, 1913, and what purports to be an agreement between the defendant and the Lozier Motor Company under date of June 11, 1914, but they are not identified by or made part of the petition or any affidavit. The agreement between Houpt individually and the Lozier Motor Company is substantially as alleged in the petition, but the agreement between the defendant and the Lozier Motor Company only provides for the receipt by the defendant on consignment of three cars for exhibition and demonstration, and repair parts, and provides that all other shipments of cars were to be accompanied by sight drafts attached to the bill of lading, and it contains no provision for the keeping of accounts subject to the inspection of the Lozier Motor Company. The books, records and papers of which an" inspection is sought are alleged to be the books, records and papers of Houpt individually, which are shown to be in the possession of the defendant. It is not shown that the contract with Houpt individually was assigned to the defendant, or that it has in any maimer assumed his obligations thereunder. In these circumstances the books, records and papers of Houpt individually are not shown to be material to any cause of action which the plaintiff may have against the defendant, and the court was not warranted in granting, as it did, an inspection of all books, papers and documents relating either to the transactions under the contract with Houpt individually or with the defendant. (See Code Civ. Proc. § 803 et seq.; Gen. Rules Pr., rule 15.)
It follows that the order should be reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.
Clarke, P. J., McLaughlin, Smith and Page, JJ." concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.