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Schuler v. Woodward

137 A.D. 576 Court First Department, Decision date 1910-04-08 English

Delivered by McLaughlin, J.:

Contents

Majority

p. 576
George H. Schuler, Respondent, v. James T. Woodward and Others, as the Reorganization Committee of the Southern Steel Company, and Others, Appellants, Impleaded with First National Bank, Defendant.
First Department,
April 8, 1910.

Headnote

Discovery — examination of party before trial — no examination to procure inadmissible evidence.
A commission will not.issue to take the testimony of a party before trial unless it appear that the testimony is material to the issue to be tried.
Thus, the stockholder of a foreign corporation suing to restrain a reorganization committee from acquiring the corporate assets and from carrying out a proposed plan or reorganization, is not entitled to examine the plaintiff before
p. 577
trial on oral questions tó show that a third person made a breach of a contract to lend money to the corporation whereby it became bankrupt, such evidence being inadmissible.
The court will not permit its process to be used in one action to enable a party to. ascertain whether he has a cause of action or defense in a contemplated action.
Appeal by the defendants, James T. Woodward and others, as the reorganization committee, etc., and others, from that part of 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 30th day of December, 1909, which directs that a commission issue for the examination of a witness in behalf of the plaintiff, before trial, upon oral questions.
William, B. Hornblower, for the appellants.
Abram, J. Bose, for the respondent.

Action by a stockholder of a foreign corporation on behalf of himself and other stockholders similarly situated to restrain the appellants, as a reorganization committee, and others from acquiring the property and assets of the corporation and froth carrying out a proposed plan for reorganization, and to have such plan declared illegal and void in fraud of their rights. After issue had been joined the plaintiff obtained an order for the examination of a witness residing at Chattanooga, Tenn., upon oral' questions, and the appeal is from such order.

.1 am of the opinion that the order appealed from should be reversed. The subject-matter concerning which it is desired to examine the witness is in no way connected with or material to the issues involved in the action. Such examination can only be for an ulterior purpose, and for that reason the motion should have been denied. A commission will not issue to take the testimony of a witness in advance of the trial unless it is made to appear that such testimony is material to the issue to be tried. ( Wood v. Hoffman Co., 121 App. Div. 636 ; Gavin v. N. Y. Contracting Co., 122 id. 643 ; Ehrich v. Root, Id. 719 ; Oakes v. Star Co., 119 id. 358;

p. 578
Grant v. Greene, 118 id. 850; Potter v. Morning. Journal Assn., 49 id. 242. See, also, Gen. Rules of Practice, rule 82.)

The examination is desired for the purpose of showing the breach of a contract on the part of the firm of Kean, .Van Cortlandt- & Co. and the corporation in question to furnish certain moneys to it, which failure it is claimed was the cause of or resulted in the bankruptcy of the corporation ; but the failure of such firm to perform the contract, if made, is-in no way involved in the issues of this action, nor would evidence bearing on that subject be admissible at the trial. The court will not permit its process to be used in one action to enable a party to ascertain whether he may not have a cause of action or defense in a contemplated action.

The order so far as appealed from, therefore, is reversed, with ten dollars costs and disbursements, and the motion for the examination of the witness referred to denied, with ten dollars costs.

Ingraham, P. J., Clarke, Scott and Dowling, JJ., concurred.

Order 'reversed, with' ten dollars costs ,and disbursements, and motion for examination denied as stated in opinion, with- ten dollars costs.

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