Majority
p. 134Julius L. Anderson, Who Sues on His Own Behalf and on Behalf of All Other Creditors of the Defendant, Iron Railway Company, Who May Become Parties to This Suit and Contribute to the Expense Thereof, Appellant, v. Frederick J. Lisman and Others, Individually and as Partners under the Firm Name of F. J. Lisman & Co., Respondents, Impleaded with Iron Railway Company, Defendant. First Department, January 22, 1909.
Headnote
Discovery —: examination before trial to discover terms of contract and disposition of consideration — practice when order of examination too broad. ,Where the basis of the plaintiff's action is a contract between a defendant corporation of which he is a stockholder and another corporation, and individual defendants admit the existence of the contract hut deny that it is correctly set forth by the plaintiff, he is entitled to examine the defendants to find out what the contract actually was.
So, too, he is entitled to exámine the defendants as to the payment and disposition of the consideration for such contract, when their undisputed relation ■ thereto is such as to justify the presumption that they have such knowledge.
If an ¡order for examination before trial be too broad, the remedy Is to move to limit the scope of the examination, not to vacate the order in toto.
Appeal by the plaintiff, Julius L. Anderson, who sues on his own behalf, etc., from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 28th day of October, 1908, vacating an order for the examination of the respondents before trial.
Hugh A. Bayne, for the appellant.
Clayton J. Heermance, for the respondents.
We think that the affidavit upon which the order for the examination . of the individual defendants was granted was sufficient to sustain the order. The basis of the action is .the contract between the Detroit Southern Railway Company and the Iron Railway Company. The defendants admit that there was such a contract, but deny that it is correctly set forth by plaintiff. He is certainly
p. 135
entitled to examine them to find out what the actual contract was. We think also that it is made apparent that defendants have knowledge as to the payment and disposition of the consideration. At least their undisputed relation to the transaction is suchas to justify the presumption that they have such knowledge, and this is sufficient. (Grant v. Greene, 118 App. Div. 850 -853.) It may be that the order permitted too wide a scope for the examination. Upon that point we express no opinion, but if it did, the defendants’ remedy was to move to limit the examination, but not to vacate it in toto. As the plaintiff is clearly entitled to some examination the order vacating the order for examination must be reversed, with ten dollars costs and disbursements to the appellant, and the motion denied, with ten dollars costs, without prejudice to a motion by defendants to limit the scope of the examination. A date for the examination to proceed will be fixed in the order to be entered hereon which will be settled on notice.
Present — Ingraham, Laughlin, Clarke, Houghton and Scott, JJ.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, without prejudice to motion as stated in opinion. Settle order on notice.
Cases cited
- Grant v. Greene 118 App. Div. 850 p. 135