Opinion
Argued November 22, 1938
Decided February 28, 1939
Appeal from the Supreme Court, Appellate Division, First Department.
Allen W. Dulles, Emery H. Sykes and Edward G. Miller, Jr., for appellants. John Ross Delafield, Wilmurt B. Linker and Leonard L. Barrett, amici curiae. John W. Kelly, Frank J. Podesta and Benjamin Rockmore for respondents.
A motion for summary judgment has been granted, and a referee appointed and directed to take testimony and report, not only in connection with taking and stating the accounts, but "to ascertain and report concerning all of the acts or omissions of the defendants * * *, which acts or omissions may have affected the failure to receive more, or may have caused a diminution, of the funds and securities now held by the said defendants * * *." In so far as an accounting is based upon wrongdoing thus alleged, it may not be had unless such wrongdoing is first established. ( New York, P. B.R.R. Co. v. Dixon, 114 N.Y. 80, 85; Husted v. Thomson, 158 N.Y. 328, 336; Jackson v. Andrews, 98 N.Y. 672, 675; Pybus v. Smith, 1 Ves. Jr. 189; Osgood v. Franklin, 2 Johns. Ch. 1, 27; affd., 14 Johns. 527.) The bondholders are entitled to an accounting, but the extent of the accounting depends not alone upon the so-called Fiscal Agency Agreement, but upon the course of conduct of the fiscal agents and whether the defendants have properly performed their duties as fiduciaries.
The motion for summary judgment should, therefore, have been denied.
Upon the trial of all the issues an opportunity may be afforded to the Municipality of Medellin to be made a party.
The orders should be reversed, without costs, and the motion denied. The first question certified is answered in the negative, and the remaining questions are not answered.
CRANE, Ch. J., O'BRIEN, HUBBS, LOUGHRAN, FINCH and RIPPEY, JJ., concur; LEHMAN, J., taking no part.
Ordered accordingly.