Montrose v. Wanamaker

—The agreement of dissolution, dated December 1, 1886, and set out in the complaint, provides that during the full term or terms of the respective contracts then existing between Merritt & Co., and Hagadorn & Newman with Wanamaker & Co., E. A. St. John, the retiring partner, should sell the. goods of those firms in conjunction with Susan E. Wanamaker, the defendant, and that the commissions realized from said sale shall be ' equally divided between the parties to the agreement.

The complaint alleges that defendant has violated that agreement by refusing constantly to allow St. John to make such sales, though often requested; and has refused

Motion is now made by plaintiff for a discovery by defendant of the sales and commissions.

The motion is resisted on the ground among others that the contract between Merritt & Co. and Wanamaker & Co., “was terminated in accordance with the terms thereof,” by a letter written by Merritt & Co., a copy of which is annexed to defendant’s affidavit. The contract between Merritt & Co. and Wanamaker is also annexed. From an inspection thereof it appears that by its terms, Wanamaker & Co. were to be allowed to sell the goods of Merritt & Co., through a large extent of territory for the term of three years, from April 10, 1886, “unless the contract therefor, should be sooner terminated by mutual consent.”

No action by Merritt & Co. could terminate the contract, unless consented to by the other contracting party. And after Wanamaker and St. John had agreed that, “ during the full term of the contract,” St. John should be entitled to half its benefits, any consent by Wanamaker to the termination, would be a fraud upon St. John, unless by him consented to, and would be ineffectual to destroy his rights.

It follows, that if any sales were made during three years from April 10, 1886, by Wanamaker, of goods manufactured by Merritt & Co., the rights of St. John would attach, irrespective of any arrangement between Wanamaker and Merritt & Co., to which St. John was not a consenting party.

Objection is also made to the discovery of the sales made by the defendant for Hagadorn & Newman.

The affidavit recites that no written contract existed between Wanamaker & Co., and the firm of Hagadorn & Newman who had however been “in the habit of shipping goods ” to Wanamaker, before the formation of the firm of Wanamaker & Co., which course of business continued during the existence of that firm.

Whatever may have been the nature of the arrangement between Hagadorn & Newman, and Wanamaker & Co., it is plain that the continuance of its benefits to St. John was contracted for in the agreement for dissolution. There is no denial that -the sales have continued, nor any allegation that St. John has, in any way, forfeited his rights to one-half the commissions realized upon such sales.

The moving papers contain an allegation that defendant conducts her business through the agency of her husband; from which it is argued that it is not in her power alone to furnish the information sought, and that discovery should therefore be denied.

But were it otherwise, the discovery would not be thereby thwarted.

A court of equity directing discovery, requires that the means of knowledge, within the reach of the party, be diligently resorted to

The answer must be to the extent of the party’s ability, and the knowledge of an agent is regarded as the knowledge of the principal.

Nor is the objection valid that Hagadorn & Newman and Merritt & Co., are in possession of the information sought. They are strangers to the litigation, and it is not the policy of the law that such parties be vexed with matters in which they have no concern. The parties litigant are before the court, and each has a right to probe the conscience of the other. The plea that other means of knowledge exist, has never been allowed to prevail. Defendants are in error in supposing that the power to enforce discovery is resorted to with reluctance. On the contrary, wherever confidential relations exist, courts are swift to enforce frank and full disclosure of all facts in which the parties have a common interest. Zimmerman v. Dieckerhoff. 28 Weekly Dig., 93, 94.

The right to call upon the opposing party for knowledge within his possession, has always been sustained by courts of equity. The exercise of that right is found so beneficial,‘that the power to enforce discovery has been almost universally granted to courts of law, and is exercised summarily on motion as justice may require.

An action cannot be maintained in the courts of this state to obtain discovery in the prosecution or defense of another action. Section 1914, Code Civil Procedure. But that limitation in no way affects the power or duty of the court to enforce such discovery as may be required to determine the merits of the action in which the discovery is sought.

Whether it shall be granted in answer to interrogations filed, as was the ancient custom, or upon an oral examination of the party at or before the trial, or by requiring copies of documents, is matter of detail within the discretion of the court.

In the present case the disclosure sought may enable the plaintiff .to shorten the trial and economize the public time.

The order will be that defendant, within ten days, serve upon plaintiff’s attorney, sworn statements of the sales made by or on behalf of defendant, of goods of Hagadorn & Newman and of Merritt & Co., subsequent to the dissolution of the firm of Wanamaker & Co., and down to the present time; giving the date of each sale, and the amount, the name of the vendee, and the amount of commission realized thereupon.