Coit v. Goodhart

39 N.Y.S. 48 | N.Y. App. Div. | 1896

Ingraham, J.:

This action is brought to set aside a settlement of accounts between the plaintiff and the defendants P. J. Goodhart & Co., a transfer of all claims and demands by plaintiff against said P. J. Goodhart & Co. to the defendant Lehman, and for an accounting between the plaintiff and the defendants P. J. Goodhart & Co. in relation to certain transactions between them.

The complaint alleges that the plaintiff, about the 1st of January, 1888, opened a speculative and general account with the firm of P. J. Goodhart & Co., who were then stockbrokers in the city of New York, and continued such account until and after the 1st day of March, 1894; that during that period said P. J. Goodhart & Co. rendered monthly accounts to the plaintiff of various transactions between them, and that in consequence of the representations made by said P. J. Goodhart & Co. to the plaintiff, plaintiff believed that the said accounts were correct, and relied upon the statements contained therein; that subsequently P. J. Goodhart & Co. ascertained that the accounts were not correct, and that a new accounting was had by which upwards of $7,350 was found to be due by P. J. Goodhart & Co. to the plaintiff, and that that money was paid to the plaintiff, whereupon plaintiff assigned all demands against P. J. Goodhart & Co. to the defendants Lehman Brothers.

The complaint then alleges, upon information and belief, that during the period from January 1, 1888, to March 1, 1894, the accounts rendered to the plaintiff by P. J. Goodhart & Co. were erroneous in not crediting the plaintiff with all that he was entitled to receive and by charging him with more than he had received, to the extent of about the sum of $500 in each and every month during the -said period, and which belonged to the plaintiff; and that to induce the plaintiff to settle for the sum of $7,350, and to make the alleged transfer nominally to the said Lehman Brothers, said P. J. Goodhart & Co. represented to the plaintiff that the sum named in said transfer was all that the plaintiff was entitled to receive from the said firm of P. J. Goodhart & Co. and that they could find nothing more coming to the plaintiff than the amount then and there stated, and that the accounts, so far as they knew, were correct. The complaint demands judgment that this settlement be set aside, the tranfer to Lehman Brothers be set aside, and that an accounting be ordered.

Before plaintiff will be entitled to such an accounting it will be necessary for him to prove either fraud or mistake in the settlement of the accounts. The defendants ask that the plaintiff be required to furnish a bill of particulars specifying the instances in which the account was incorrect.

This motion is opposed by an affidavit of the plaintiff in which he swears that it is impossible for him to furnish the particulars without access to the books of the defendants P. J. Goodhart & Co. and and that they have knowledge of the respects in which the account is incorrect. Before the account can be opened, these allegations of fraud or mistake must be ¡Droved. The plaintiff does not deny that he has the monthly accounts rendered to him by the firm of P. J. Goodhart & Co., and there is not the slightest evidence tending to show that the books of P. J. Goodhart & Co. will show any more than the accounts that have been rendered to him. After such statement of the accounts between the parties, the burden of proof is upon the plaintiff to show some particulars in which the accounts were incorrect, from which it can be found that there was fraud or mistake because of which the accounts furnished to the plaintiff were incorrect in failing to give plaintiff all the credits to which he was entitled, or in making charges against him which were unauthorized or improper. "We think the defendants are entitled to know the nature of the errors in the accounts ; with what amounts he was entitled to be credited and what sums he was charged with that he had not received. The mere fact that the complaint alleges that the total amount of the errors amounted to about $500 in each month gives no information to .the defendants as to the nature of the illegal or improper charges against the plaintiff, or as to the nature of the credits to which he was entitled. It simply specified the general amount of the errors, not the particular items, or nature of the charges that were improperly made, or the credits that were not allowed. Here are transactions extending over a period exceeding six years, involving a large number of transactions and large sums of money. There was an implied settlement by the receipt and acceptance for six years without objection, of the accounts as rendered, the reopening of the' accounts upon the application of the defendants P. I. Good-hart & Co. on the ground that they had discovered errors in favor of the plaintiff, and the resettlement of the accounts by the payment of a large sum of money, and to justify this action at all, plaintiff must have knowledge of some items in the accounts which either show fraud on the part of the defendants or a mutual mistake between the parties as to the proper amount due to the plaintiff. To enable the defendants to meet these charges it seems to us clear that there should be a statement by the plaintiff of the nature of the errors in the account upon which he bases his right to open the settlement. It is claimed that it would be impossible for the defendants to prepare to meet this charge against them without the particulars of the errors in the account upon which the plaintiff bases his demand for judgment.

TVe think, therefore, that the motion should have been granted, and the order below is reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs to abide the event, and the plaintiff directed to furnish to the defendants a bill of particulars specifying the nature of the errors in the account and the particular charges which he claims should not have been charged against him, or the particular credits which should have been allowed.

Van Brunt, P. J., Barrett, Rumsey and O’Brien, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.