Kliger v. Rosenfeld

Houghton, J.: An interlocutory judgment directing that the defendants account, concerning the partnership business which was. adjudged to exist between them and the plaintiff was entered April 10, 1905, and a referee was appointed to take and state the account. - On the coming in of his report numerous exceptions were filed to his' findings, but they were overruled and judgment on them ordered, and from such judgment the defendants appeal. On the hearing before the referee the ■ plaintiff did not ask and the referee did not direct that the defendants. file an account, but the plaintiff at once proceeded to prove the state of the partnership affairs by oral and documentary evidence. To this procedure the defendants made no objection and they cannot "now complain that the hearing was irregular because no account was filed and issues formed by objections to it. The proper practice where a party is adjudged to account either before the court or a referee appointed by it, is that prescribed by the 107th Chancery rule, and the party so directed should prepare and file and verify an account of the matter as he claims the facts to be. (New York Bank Note Co. v. Hamilton Engraving Co., 56 App. Div. 488.) If such account is satisfactory to the opposing party, that is an end of the matter. -If it is not, the other party should .file his objections and specify what is wrong and what surcharges he claims should be made. In this manner issues for litigation are made concerning specific items and.the mass of uncontested items are eliminated from proof and further consideration until the making up of the findings and report. 1 . While the defendants cannot complain that the proper procedure was not followed in this case,, we are of the opinion that the account- . ing was so.fundamentally wrong, that the judgment-must be reversed and a new hearing had. The referee allowed the plaintiff to introduce in evidence as a [398] part of his- substantive proof of they assets' and liabilities ■ of the copartnership firm a.-statement made by"-defendant Eosenfeld in behalf of the firm to the commercial agency of E. G. Dun & Co. Both defendants objected to this as not proper for such purpose, and the defendant Weisman on the further ground that it was not evidence as against him. The respondent by his brief does not claim, and we do. not find in the record, that Weisman had anything to do with the making of the report, or that he, with knowledge, adopted its statements. The fact. that one member of the firm made the statement did not bind all the others. It. was not made respecting a partnership transaction in such sense as the law makes the statement of one partner the declaration .of all the others. If Eosenfeld had filed a verified account, or testified to facts contrary to the items -contained in the statement' to the.commercial agency, it would.then have been competent to prove the statement for the purpose of contradicting him and to show that he had at another time made statements contrary to his testimony and claim. It was not admitted for any such purpose, however, and the error was vital, for it is manifest from the referee’s report that his findings are largely based on the various assets and liabilities stated therein. • - ■ Other errors are' urged ’ by the appellants and many items are claimed to have been erroneously charged against them, and credit, denied as to others; but we do not feel called upon to discuss them separately in view of our conclusion that such errors exist as call upon us to order a new accounting! . ’ • The judgment should be reversed and the referee discharged and an .accounting had before another referee, with costs of this appeal' to appellants to abide the' event. Patterson, P. J., McLaughlin, and Lambert, JJ., concurred.