Davidoff v. Kaplan

Although stating but one cause of action, the complaint consists of three distinct claims, all for breach of contract.

The defendants as partners conducted a jewelry business in the city of New York. The partnership was dissolved prior to the commencement of this action. The defendant Bamdas, who had a fifty-three per cent interest therein, resides in Belgium. Plaintiff managed for defendants a branch of the business at Montreal, Canada. He at first proceeded against Samuel and Lazare Kaplan because of his inability to effect personal service of the summons and complaint upon Bamdas, inasmuch as that defendant is a resident of Belgium and his address was unknown to plaintiff. The other two defendants, Samuel and Lazare Kaplan, filed a joint answer which was stricken out for disobedience of an order, with leave to plaintiff to proceed as if there had been a default in pleading by them. The order disobeyed was for a discovery of records,

On plaintiff’s application, Bamdas was ordered to produce the books, records and memoranda which Samuel Kaplan had been previously required to produce, and for disobedience of which requirement the joint answer of Samuel and Lazare Kaplan was stricken out. This order requires Bamdas to give plaintiff a discovery and inspection and permission to take copies of books, records and memoranda containing the transactions of defendants’ Canadian business, and contains, in addition to some general specifications, thirteen items, each relating to a particular class of of records, but with that limitation being general and comprehensive. On behalf of Bamdas there were deposited in the county clerk’s office certain books and papers, notice thereof being given to plaintiff. This defendant also tendered the books kept in the New York office containing the account with the Montreal branch office, employed certified public accountants, whose affidavits were submitted on this motion, and caused their assistance to be tendered to plaintiff’s accountant.

In an affidavit in opposition to this motion, verified by Lazare Kaplan, attention is called to the lack of proof that Bamdas has in his possession the books and records which were not produced. That defendant also avers that the books and records filed were all the records used by defendants in their business, excepting a certain book no longer in their custody or control; that every book, record, voucher and report which could be found has been produced; that there is none such in their possession that has not been produced; and that the reason the said affidavit is made by Lazare Kaplan is that “ the defendant Bamdas has at all times resided without the United States, in Belgium, and is not now in the United States of America.” This affiant also avers that “ the defendant Bamdas never had any books, papers or vouchers herein. They were always in possession of the plaintiff, and later in possession of the defendants.”

The defendant Samuel Kaplan also verified an affidavit which was filed in opposition to the motion, averring that there had been produced all the books, papers and records which could be found and that there are none in the possession or control of defendants which have not been produced.

We are of the opinion that the penalty enforced in this case should be resorted to only where there is a clear and deliberate

of testimony or the production of books and papers by proper regulations prescribed by the legislative authority, and for a failure to give or produce such evidence, the law might authorize a presumption in a proper case against the party refusing, justifying the rendering of a judgment by default, as if no answer had been filed. While it may be true that in some of the State statutes passed on the subject, and in decisions applying them, some confusion may appear to exist, resulting from confounding the extent of the authority to punish as for a contempt and the right to engender a presumption relative to proof arising from a failure to give or produce evidence, it is accurate to say that when viewed comprehensively the statutes and decisions in effect recognize the difference between the two, and therefore may be substantially considered as but an exertion by the States of a like power tó that which was conferred upon the courts of the United States by the original Judiciary Act and by Revised Statutes, § 724.”

We are not convinced that it was sufficiently shown on this application that the defendant Bamdas had willfully withheld books, papers or records which he had been ordered to produce. It is contended for him that some of them never existed. From the willful disobedience of the defendants Kaplan it does not follow that Bamdas has been recalcitrant as well. Furthermore, plaintiff’s three claims, although they are not separately stated, depend upon different theories, and it is not apparent, as to any or all- of them, that books, papers or records which have not been produced would be of assistance to plaintiff.

This matter should have been referred to a referee to hear and report as to the practicability of complying with the order and as to the effect of non-compliance so far as the records have not been produced.

The order should be reversed, with ten dollars costs and disbursements, and a reference to an official referee directed for the purpose of hearing and reporting to the court at Special Term, where the motion will be disposed of after such report shall have been filed.

Clarke, P. J., Smith and McAvoy, JJ., concur; Dowling, J., dissents.

Order reversed, with ten dollars costs and disbursements, and a reference ordered to an official referee to hear and report to the court at Special Term.