179 Misc. 6 | N.Y. Sup. Ct. | 1942
The petitioner, Bose Cohen, seeks an order for the examination of the respondents for the purpose of determining which of them should be joined as defendants in an action which she contemplates bringing, and to obtain information to enable her to draw a complaint. She also seeks the production of certain books and records. No action has, as yet, been commenced.
According to the moving papers, Mrs. Cohen and her husband, Louis Cohen, and son, Charles Cohen, were the owners of certain automotive equipment, etc., used in connection with the hay and coal business which the husband and son conducted prior to January 17, 1941. On or about that date the Cohens employed Stewart, who is a practicing attorney, to organize a corporation to carry on the same business. The three Cohens executed a certificate of incorporation wherein they were named as directors until the first meeting and whereby they subscribed to the stock to be issued by the corporation, as follows: Bose, 51 shares; Louis, 1 share and Charles, 48 shares.
On January 30,1941, Charles Cohen, allegedly under Stewart’s direction and without consideration, transferred the property of the unincorporated business which apparently stood in his name, to Helen Fischer. On the same date, Louis Cohen and Charles Cohen executed assignments of their stock subscrm
The petitioner alleges that she never received the stock for which she subscribed; that she never received any notice of any corporate meeting; that she never resigned as a director nor assigned her subscription rights. She also maintains that Stewart refuses to allow her to participate in the affairs of the corporation or to give her any information relative thereto. The answering affidavits fail to satisfactorily explain how the petitioner was eliminated from the picture. In view of this situation, the petitioner asks that she be permitted to examine these four individuals in order that she may identify those whom she claims deprived her of her property rights in this corporation, with a view to bringing an action against whoever is responsible. She also seeks the examination for the purpose of obtaining sufficient facts to enable her to prepare a complaint. This examination is sought pursuant to the provisions of section 295 of the Civil Practice Act and rule 123 of the Rules of Civil Practice. Under the provisions of the Code of Civil Procedure, which fore-ran the present provisions of the Civil Practice Act, an examination of a proposed party before an action was actually commenced could only be had for the purpose of perpetuating testimony. (Matter of Packer, 188 App. Div. 926; Matter of Moto Bloc Import Co., 140 id. 532; Matter of Dain’s Sons Co., 146 id. 918; affd., 204 N. Y. 623; Matter of Schlotterer, 105 App. Div. 115.) Even in such cases the relief was rarely and sparingly granted. (Merchants’ National Bank v. Sheehan, 101 N. Y. 176.) Since the enactment of section 295 and the pro
I am in accord with this construction of section 295 of the Civil Practice Act insofar as the purpose of such examination is to identify prospective defendants, and the order herein sought will be granted to that extent. On such examination the production of the corporate books and papers is authorized by section 296 of the Civil Practice Act. (Lauffer v. Eastern Star Temple, supra.)
The petitioner also maintains that she is entitled to this examination to obtain information to enable her to draw a complaint. I find no authority for an examination for that purpose at this stage of the proceedings. The cases cited by the petitioner are not in point, since they all deal with situations where the defendants were already identified and the actions already commenced. An examination for that purpose before action brought has been denied on at least two occasions. (Matter of Dreyfuss, supra, [2d Dept.]); Matter of Titanium Alloy Mfg. Co., 198 N. Y. Supp. 503 [Sup. Ct. Erie County].) It of course must be conceded that the right of a pretrial inquisition is purely statutory. (Heishon v. Knickerbocker Life Ins. Co., 77 N. Y. 278; Woods v. Barton, 226 App. Div. 38.) The right to examine before the action is commenced is accorded to a prospective party only where “necessary for the protection of his rights.” (Civ. Prac. Act, § 295.) Such necessity is apparent when the examination is sought for the purpose of identifying the prospective defendants, for without it no summons can even be prepared. The same necessity is not apparent, however, for the purpose of obtaining information to enable a prospective plaintiff to draw a complaint. The action may be commenced without such information. Once a person has demonstrated his good faith and sincerity by actually naming the defendant and effecting service of a summons upon him, then the court may, in a proper case, permit an examination either of the defendant or some third person. (Civ. Prac. Act, § 288; Rules of Civ. Prac. rule 122.) To permit an examination for such purpose before the action is even commenced, not only appears unnecessary, but might conceivably subject totally innocent persons to great inconvenience, if not persecution. The orderly administration of justice does not countenance such a procedure.
An order will be granted directing Charles E. Stewart, Reginald H. McKee, Helen W. Fischer and Edmund J. O’Connor to appear before Charles F. Fish, an attorney and counselor at law, who will be designated as referee for that purpose, at a time and place to be fixed in the order, and submit to oral examination as to the matters set forth in the order to show cause, and to produce upon such examination for the inspection of the petitioner, the books of account, stock certificate books, stock transfer books, certificate of incorporation, by-laws, minute books and all other records of the Eastern Hay & Coal Co. Inc., pertaining to the formation and ownership of said corporation.