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LOMISH v. MORRIS NIMELSTEIN SPORTSWEAR COMPANY (05/21/51)

May 21, 1951

LOMISH
v.
MORRIS NIMELSTEIN SPORTSWEAR COMPANY, INC., APPELLANT



Appeal, No. 107, Jan. T., 1951, from decree of Court of Common Pleas No. 4 of Philadelphia County, March T., 1949, No. 5326, in case of George Lomish v. Morris Nimelstein Sportswear Company, Inc. Decree affirmed.

COUNSEL

Philip S. Polis, for appellant.

Herman M. Modell, for appellee.

Before Stern, Stearne, Jones, Ladner and Chidsey, JJ.

Author: Chidsey

[ 367 Pa. Page 394]

OPINION BY MR. JUSTICE CHIDSEY

Morris Nimelstein Sportswear Company, Inc., appellant, is the defendant in an action in assumpsit instituted by George Lomish, appellee. The corporation filed a rule upon Lomish for the production of books and records in his possession for inspection by it. This rule was discharged. Subsequent thereto appellant filed its bill in equity for discovery averring, inter alia, that it had a full and complete defense by way of set-off and counterclaim in that the parties in 1947, orally agreed to become partners; that each was to devote his full time to the partnership business and share losses and profits equally; that Lomish unknown to the corporation, in violation of the partnership agreement, secretly engaged in gainful endeavors and "did not

[ 367 Pa. Page 395]

    devote himself exclusively to the partnership business."; that by reason thereof the partnership sustained serious losses and Lomish became unjustly enriched; that Lomish has in his exclusive possession books and records for the years 1947, 1948 and 1949, an inspection of which is necessary and essential to enable the corporation to properly prepare its answer, set-off and counterclaim.

Paragraph 3 of the bill in equity for discovery sets forth the books and records, inspection of which is sought. The paragraph is as follows: "The Defendant has in his exclusive possession the following books and records for the years 1947, 1948 and 1949 dealing with Defendant's (a) Federal Income Tax Returns, (b) Bank Deposit Books, (c) Ledgers, day books and original books of entry, (d) Correspondence and statements showing the money he received from his secret gainful endeavors, (e) Legal papers served upon the Defendant pertaining to suits in connection with Defendant's income, (f) Copies of all Complaints filed by Defendant in connection with Defendant's income, (g) Vouchers and receipts for hotel and traveling expenses, (h) A record of all income, reported and unreported." Lomish filed an answer and amended answer to the bill and a hearing was held thereon. At the hearing, the corporation offered the paragraphs of the bill on the theory that no responsive answer had been filed thereto. The hearing judge sustained objections to such offers. Nothing more was presented in the way of testimony whereupon Lomish moved the court to dismiss the bill, contending that the only issue involved is whether or not there was a partnership between the parties, which fact the plaintiff has failed to prove and therefore is no entitled to discovery on the very basis on which he asks it. The court granted the motion and entered an order dismissing the bill. Exception was taken to the action of the court entering the

[ 367 Pa. Page 396]

    order. This appeal is from the order of the court below dismissing this exception.

Appellant contends that it was under no duty to introduce any evidence which would establish or tend to establish prima facie the existence of a partnership, relying upon Sherwood Bros., Inc. v. Yellow Cab Co., 283 Pa. 488, 129 A. 563; and Lesser v. Henry, 50 Pa. Superior Ct. 440. Appellee asserts and the court below held that the burden was upon the plaintiff in a discovery proceeding to establish prima facie a reason for discovery and that appellant having offered certain paragraphs of its bill and objection thereto having been ...


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