Case Name: Keller et al. v. Payne et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-01-28
Citations: 4 N.Y.S. 227
Docket Number: 
Parties: Keller et al. v. Payne et al.
Judges: 
Reporter: West's New York Supplement
Volume: 4
Pages: 227–228

Head Matter:
Keller et al. v. Payne et al.
(Supreme Court, General Term, First Department.
January 28, 1889.)
Reference—When Ordered—Accounts with Third Persons.
In an action for the price of goods, the defense was set up that plaintiff had accepted in payment the promissory notes of defendant, and plaintiff averred that he had been induced to accept the notes by the fraudulent representations of defendant as to his solvency, and offered to prove the latter’s insolvency by enteles on his books. Held, that a compulsory reference was not authorized, the accounts to be examined being for the most part between defendant and third persons, and having only a collateral bearing on the issues in the case.
Appeal from special term, Kew York county.
° Action by Frank Keller and another against William H. Payne and another. A compulsory order of reference was made, and the defendants appeal.
Argued before Van Brunt, P. J„ and Daniels and Bartlett, JJ.
L. Laflin Kellogg and Jandine Lyng, for appellants. Chas. Miehling, for respondents.

Opinion:
Bartlett, J.
This is an action to recover the purchase price of goods sold and delivered. The plaintiffs accepted from the defendants in payment therefor two promissory notes, which had not yet fallen due when the suit was begun, but which they offered to restore to the defendants, alleging that they had been induced to take them by means of false representations as to the defendants' solvency. Upon the trial at circuit, before a jury, the plaintiffs endeavored to prove that the defendants were insolvent, by entries from the books of the defendants' firm; and the learned judge who was presiding finally ordered a reference, of his own motion, on the ground that the case involved the examination of a long account. The defendants admitted the purchase of the goods which the plaintiffs claimed to have sold them, but de nied the alleged fraudulent representations, and pleaded the giving and acceptance of the notes as an affirmative defense. The case, therefore, did not call for the examination of a long account, or any account whatever, between the parties. The entries in the books of the defendants were material only as bearing upon the question of their solvency at the time of the alleged misrepresentations. It is well settled that, in order to authorize a compulsory reference, the account must be between the parties to the action, and must be directly involved in the suit. Camp v. Ingersoll, 86 N. Y. 433. Here it is apparent that the accounts by which the plaintiffs seek to show that the defendants were insolvent are for the most part, if not wholly, between the defendants and third parties, and that such accounts have only a collateral bearing upon the issues in the case. Under these circumstances, the action of the court below cannot be sustained, unless we are prepared to hold that a compulsory reference is authorized in any action based upon the allegation of false representations by a defendant as to his solvency, wherein the plaintiff proposes to read accounts from the defendant's books, between the defendant and other creditors, for the purpose of proving the alleged fraud. The order should be reversed, with costs, and the case should be restored to the circuit calendar for trial. All concur.