Keller v. Payne — 21 N.Y. St. Rep. 387

Majority

p. 387

Frank Keller et al., Resp’ts, v. William H. Payne et al., App’lts.

(Supreme Court, General Term, First Department,

Filed January 28, 1889.)

Headnote

Practice—When compulsort reference authorized.

The account must be between the parties to the action, and must be directly involved in the suit in order to authorize a compulsory reference. Camp v. Ingersoll ( 86 N. Y., 433 ) followed.

Appeal from compulsory order of reference made in the course of the trial of the action upon the court’s own motion.

L. Laflin Kellogg, for app’lts; Charles Miehling, for resp’ts.

This is an action to recover the purchase price of goods sold and delivered. The plaintiffs accepted from the defendants in payment therefor two promissory notes which had not yet fallen due when the suit was begun, but which they offered to restore to the defendants, alleging that they had been induced to take them by means •of false representations as to the defendant’s solvency. Upon the trial at circuit, before a jury, the plaintiffs •endeavored to prove that the defendants were insolvent, by entries from the books of the defendants’ firm; and the learned judge who was presiding finally ordered a reference of his own motion, on the ground that the case involved the examination of a long account.

The defendants admitted the purchase of the goods

p. 388

which the plaintiffs claimed to have sold them, but denied the alleged fraudulent representations, and pleaded the giving and acceptance of the notes as an affirmative defense. The case, therefore, did not call for the examination of a long account, or any account whatever, between the-parties. The entries in the books of the defendants were-material only as bearing upon the question of their solvency at the time of the alleged misrepresentations.

It is well settled that in order to authorize a compulsory reference, the account must be between the parties to the-action, and must be directly involved in the suit. Camp v. Ingersoll, 86 N. Y., 433 . Here it is apparent that the-accounts by which the plaintiffs seek to show that the defendants were insolvent, are for the most part, if not-wholly, between the defendants and third parties, and that' such accounts have only a collateral bearing upon the issues in the case.

Under these circumstances, the action of the court below cannot be sustained, unless we are prepared to hold that a compulsory reference is authorized in any action based! upon the allegation of false representations by a defendant as to his solvency, wherein the plaintiff proposes to read: accounts from the defendant’s books between the defendant and other creditors for the purpose of proving the; alleged fraud.

The order should be reversed, with costs, and the case; should be restored to the circuit calendar for trial.

Van Brunt, Ch. J., and Daniels, J., concur.