F. H. Hecht & Co. v. Felenga

Plaintiff moves to vacate notice of examination before trial of plaintiff corporation by or through L. Earl Bretz, treasurer of plaintiff corporation. Defendant’s first counterclaim seeks recovery of an alleged balance due as compensation for his services as employee or agent of plaintiff, measured by salary, commissions, and possibly by a share of plaintiff’s business profits. Defendant’s second counterclaim seeks damages resulting from an alleged wrongful discharge. Plaintiff’s opposition is mainly that this action is in equity, and prior to an examination of this character defendant must first establish his right to an accounting. The character of an action is determined from the facts alleged and not from the relief demanded. (Jones v. Gould, No. 2, 123 App. Div. 236; Shalek v. Jetter Brewing Co., 155 N. Y. Supp. 972; Bradbury’s Rules of Pleading, vol. 1, p. 321.) In New York it is established that an agent or employee who sells on commission or under an agreement that his compensation shall be measured by a percentage of the profits has an adequate remedy at law and cannot sue in equity and is entitled to prove his case by an examination of his employer before trial and is also entitled to a discovery and inspection of his employer’s books and records. (Hathaway v. Clendening Co., 135 App. Div. 407; Oppenheimer v. Van Raalte, 151 id. 601; Guince v. Murphy, Inc,., 223 id. 337.)

*762Item 1 is not allowed because admitted by plaintiff's reply. Items 2, 3, 4, 5 and 6 are allowed. Item 7 is allowed to the following extent: Concerning the additional commissions for extensions and renewals of credit as alleged in paragraph 12 of defendant’s answer. Only such books, records and documents shall be produced upon the examination as shall be shown essential and necessary and the same or such parts thereof as may be used to refresh the recollection of the witness may be offered in evidence. Should defendant desire a discovery and inspection of plaintiff’s books, records, etc., he must proceed in accordance with section 324 of the Civil Practice Act. Examination shall proceed at Special Term, Part II, of this court at time to be fixed in order to be entered hereon. Settle order on notice.