Cereal Byproducts Co. v. Hall

From 1932 through 1949, the defendants, who are certifield public accountants, made annual audits of the books of the plaintiff, a corporation that deals in cereal grain byproducts as broker and jobber. In 1949 it was discovered that the plaintiff’s bookkeeper, R. C. Zastrow, had embezzled large sums from the plaintiff during the years 1947, 1948, and 1949. Part of the amount lost was recovered by the plaintiff from various sources, and it brought this action against the defendants to recover the balance, $66,333.03.

The complaint alleged that the defendants contracted to audit the plaintiff’s…