p. 219Thomas F. Nevins, Appellant, v. The Brooklyn Citizen, Respondent.Headnote
Discovery — indebtedness payable when debtor in financial condition to pay — inspection of debtor’s books and papers.Where certificates of indebtedness, upon which an action is brought, were made payable when the defendant was in a financial condition to pay consistently with meeting its other obligations, its ability to pay is a njatter of law, if there is no conflicting testimony, but it is a question of fact where the evidence is conflicting, or where different inferences may be drawn therefrom. Hence, the plaintiff is entitled to a complete discovery of the defendant’s books for the entire period between the date of issuing the certificates and the date of the commencement of the action, in order to determine whether the defendant was at any time in financial condition to make payment as agreed.
Appeal by the plaintiff, Thomas F. Kevins, from part of an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the 22d day of October, 1914, denying an inspection and discovery of defendant’s books from the 23d day of February, 1895, to the 1st day of January, 1912.
Horace D. Byrnes [Michael M. Helfgott with him on the brief], for the appellant.
Peter P. Smith, for the respondent.
The certificates of indebtedness, which are the subject of this action, when read in connection with the contemporaneous agreement, clearly indicate that they are payable when defendant is in a financial condition to enable it to make such payment consistently with meeting all its obligations, including the other certificates issued under said agreement and of conducting its business of publishing a newspaper. This question must be determined by evidence. If there is no conflict of testimony and no room for different inferences to be drawn from the undisputed facts, its ability to pay becomes a question of law. If there is conflicting evidence, or if different
p. 220inferences may be drawn therefrom, its ability to pay becomes a question of fact. If, at any time subsequent to the issuing of said certificates, such ability to pay existed, the obligation thereon became due. Plaintiff was, therefore, entitled to a complete discovery of the books of defendant for the entire period between the date of issuing said certificates and the date of the commencement of the action. (Code Civ. Proc. § 803.) There is an inconsistency in the order as made at Special Term which limits such discovery to two years. Plaintiff was entitled to a full discovery or to none at all. So much of the order as is appealed from should be reversed, with ten dollars costs and disbursements, and motion granted permitting plaintiff a discovery for the entire period between February 23, 1895, and the date of the commencement of the action.
Jenks, P. J., Burr, Stapleton, Rich and Putnam, JJ.> concurred.
Order in so far as appealed from reversed, with ten dollars costs and disbursements, and motion granted permitting plaintiff a discovery for the entire period between February 23,1895, and the date of the commencement of the action.