Maicas v. Leony — 22 Abb. N. Cas. 1

Majority

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MAICAS v. LEONY.^[1]

N. Y. Supreme Court, First Department, General Term ;

November, 1888.

Again, December, 1888.

Headnote

1. Interlocutory judgment, entry of, by clerh,} The clerk cannot enter' an interlocutory judgment upon a referee’s report except after application has been made to the court and direction in that behalf given.

2. Reference ; report to direct form of judgment.} A referee’s report, in order to authorize the clerk to enter judgment in an equity action must settle the form of the judgment so to be entered, otherwise judgment can only be entered upon application to the court.^[2]

3. Same; power of the cleric.} The duties of the clerk are simply clerical, and he is only to determine whether the judgment proposed is in the exact language of the judgment directed to be.

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entered by the report or decision. If it is not, he cannot deter- , mine whether or not it is substantially the same.

4. Reference; powers of referee to direct judgment.'] Under a reference to hear and determine the issues in an action to dissolve a partnership and for an accounting, the referee took only a partial account and rendered an opinion that the account proceed before another referee.—Held, that the referee had no power, nor was it a proper part of the interlocutory decree entered after such opinion, to authorize a new referee to complete the trial of the issue already partly tried before the referee making the report.

Appeal from an order vacating an interlocutory judgment and from an order denying a motion for the appointment of another referee to proceed with the reference.

Anthony R Maicas brought action against Leon Leony to dissolve a partnership, and for an accounting.

After answer, an order was made referring “ the action and all the issues therein,” to a referee, “ to hear and determine the same,” and further ordering that the referee “ shall take and state the accounts between the parties to the action, and report the amount for which judgment shall be ■entered in favor of either party against the other.”

Subsequently, and after the commencement of the hearings, an order was made appointing another referee in the place of the said referee, “ with the same powers as were conferred upon the said [Referee], in and by the order of reference made in the above entitled action ; proceedings to stand as already had.”

The substituted referee rendered an extended opinion ; finding that certain allegations of wrong, made by the complaint against the defendant, had not been sustained, and that the accounts up to a certain date were as stated in the account presented to him ; and directed that the account continue from that day on. This opinion, after enumerating, but not setting forth the findings, proceeded as follows :

“ A question of some difficulty has arisen as to the final disposition of this ease. Under ordinary circumstances, in'

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an action of this character, tlie first matter to be settled would be the question of dissolution upon the issues presented, but in this case, there was an actual dissolution before the suit, leaving the accounting, and the accounting alone, to be disposed of, yet the accounting was so complicated with the charges of misconduct against the defendant, that one could not be had without going into the other as fully as if the question of dissolution were not virtually out at the case. Nothing now remains to be done but to state the account between the parties and report the amount for which judgment shall be entered in favor of either against the other. For the purpose of doing this, however, no means have been provided; without an account of profit and loss, and a realization of assets, no final judgment can be rendered. I therefore report and find that an interlocutory judgment should be entered, decreeing that the partnership of Maicas & Company be declared dissolved as of July 16th, 1887, that down to January 1st, 1887, the accounting already had in this case is to stand; that a further accounting be had from that date down to the time of final liquidation ; that the parties and receiver be directed to produce all their books of account; that the receiver be directed to produce proofs of the payment and settlement of all claims, to collect all the outstandings and sell all the assets of the firm, and account for the proceeds, and that the referee shall then take and state the account between the parties to the action, and report the amount for which judgment shall be entered in favor of either party against the other.

“ Down to January 1st, 1887, the parties have accounted before me, inasmuch as the defendant accepts the accounts as they stand in the books of the firm, and the plaintiff has failed to upset them in any particular. To go further back than this date would be tantamount to a retrial of the whole case and issues.”

The plaintiff and defendant, however, both submitted proposed findings of fact and conclusions of law. The

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referee found nearly all of the defendant’s findings of fact and all of his conclusions of law. finding a part of the plaintiff’s findings of fact and none of his conclusions of law.

Thereupon an interlocutory judgment was entered by the clerk, which, after reciting the orders of reference and the findings in favor of the defendant, and the direction for an interlocutory judgment, and that the plaintiff account to the defendant, proceeds as follows:

“ Adjudged, that said report stand in all respects as a decision of this court and that the defendant \name\ is hereby awarded judgment against the plaintiff accordingly.

“ And it is further adjudged that said defendant is entitled to judgment in his favor upon the merits as regards the charges alleged in the complaint, and that the plaintiff account to him for the defendant’s equal share of the business of Maicas & Co., besides liis surplus capital of $11,867. 52, upon the basis of the accounting of January 1st, 1887 and that defendant have judgment against the plaintiff for the amount which may be found due upon such accounting,, together with the costs of this action.

“ And it is further ordered and adjudged, agreeably to-said report, that the partnership between these parties, under the firm name of .Maicas & Co., be and the same hereby is declared disssolved as of July 16th, 1887; that down to January 1st, 1887, the accounting already had in this case is to stand ; that a further accounting be had from that date down to the time of final liquidation; that the parties and receiver be directed to produce such proofs of the payment and settlement of all claims ; to collect all the outstandings and' sell all the assets of the firm, and account for the proceeds, and that the referee shall then take and state the account betweeen the parties to this action, and report the amount for which judgment shall be entered in favor of either party as against the other.”

The plaintiff then moved to set aside the interlocutory judgment, as being irregular and unauthorized, and further moved at the same time that the referee’s report be set aside

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as not being a compliance with the order of reference, and for the appointment of a new referee to hear and determine the issues. The court granted both motions, and appointed a new referee to hear and determine “ the issues in this action de novo, in the same manner as if no testimony had been taken.”

At the same time the court denied the defendant’s motion for an order appointing a referee to proceed with the duties of the reference and to take and state the account between the parties upon the basis of the interlocutory judgment. No opinions were rendered.

From the decisions of these motions the defendant appealed to the General Term.

Ferdinand Kurzman, for the appellant.

A. J. Dittenhoefer, for the respondent.

This action was brought for an accounting between partners. Upon consent all the issues were referred to a referee to determine the same.

Before completing the accounting and after the parties had accounted before the referee to a certain date the referee made his report, at the end of which he finds that an interlocutory judgment should be entered decreeing the dissolution of the partnership, and that a further accounting should be had from where he left off, and that the judgment should contain other provisions ; but no form of interlocutory judgment was settled by the referee and no judgment was ordered.

Upon the coming in of this report, the defendant made an application to the court to have a judgment entered, which application was dismissed, and thereafter without any motion or notice the defendant attempted to enter an interlocutory judgment with the clerk.

■ Upon this interlocutory judgment defendant thereupon moved the court for the appointment of a referee to con

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tinne the matters which had been referred to the. former referee, and the plaintiff made a motion to vacate the, judgment and report and for the appointment of a referee to try the issues de novo. ■

The defendant’s motion was denied and the plaintiff’s granted, and from these appeals were taken.

It is not at all necessary for the determination of these appeals to decide whether or nót á referee may order the entry of an interlocutory judgment under certain circumstances.

In this case there is no report by the referee, it is merely an opinion which has been called a report. It contains no findings of fact and conclusions of law such as the Code requires. It is impossible to tell upon its perusal what is opinion and what was deemed by the referee to be a conclusion either of law or fact. Neither had the clerk any power to enter the interlocutory judgment. Reference is made to section 1228 of the Code for such authority. ■

This section reads as follows : “ Where the whole issue is an issue of fact which was tried by a referee, the report-stands as the decision of the court, except where it is otherwise expressly prescribed by law, judgment upon such report or upon the decision' of the court upon the trial of the whole issue of fact without a jury may be entered by the clerk as directed therein upon filing the decision or report.”

In two important particulars the report in question failed' to authorize the clerk to enter judgment.

It will be observed that this section clearly contemplates-that it is only in cases where the whole issue has been tried that the clerk may act. The language is that where the whole issue is one of fact the report stands as the decision of the court,-and judgment upon such report or upon the-decision of the court upon the trial of the whole issue without a jury, may be entered by the clerk, etc.

The clerk hence has no power to enter an interlocutory judgment upon a decision of the court, and if the referee’s-

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report stands as the decision of the court, how can the clerk have greater rights to enter a judgment upon a report than upon a decision of the'court so that it appears that the clerk has no power to enter in any case an interlocutory judgment, except after application has been made to the court and direction in that behalf given.

Furthermore, the clerk has no power to enter a judgment except as directed in the report or decision of the court. It seems to me that this provision clearly contemplates that the report or decision of the court, in order to clothe the clerk with authority to enter judgment in equity actions without application to the court to settle its form, must in such report or decision settle the exact form of judgment to be entered ; and that it is no part of the clerk’s powers to determine whether a proposed judgment, clothed in different language perhaps, conforms to the directions of the report or decision.

His duties are simply clerical and he is only to determine whether the judgment proposed is in the exact language of the judgment directed to be entered by the report or decision. Lf it is not, he cannot determine whether or not it is substantially the same.

It seems, therefore, that a referee’s report, in order to authorize the clerk to enter judgment in equity actions, must settle the form of the judgment so to be entered ; otherwise judgment can only be entered upon the application to the court.

The orders appealed from should be affirmed with $10 costs in each case and disbursements.

Daniels and Bartlett, JJ., concurred.

On the settlement of the orders appealed from, the defendant’s counsel urged the hardship he was under, and the following opinion on the settlement was rendered.

A. J. Diitenhoefer, for the plaintiff.

Ferdinand Furzman, for the defendant.

The result of these appeals undoubtedly works a great hardship upon the respondent, -but we cannot allow the error committed by the referee to pass unrebuked without, apparently, sanctioning errors of practice which would lead to great abuses. So far as it is urged that the appellants understood that there should be .an interlocutory decree, and that the referee’s report was made in pursuance of this understanding, it seems to be .sufficient to say that the referee did not even attempt to make a report upon which, if the report had been in proper form, an interlocutory decree could have been entered. The referee went too far to support an interlocutory decree, and not far enough for the final decree. The issues before the referee embraced the taking of art account between the parties, and the referee took that account partially, then made his report, such accounting to be continued by another referee. This he clearly could not do, as it is no part of the interlocutory decree to authorize a new referee to complete the trial of the issue which has been half tried before the one making the report. We have kept the papers upon the settlement of the order some time, hoping that some method would suggest itself by which we could save the respondent from the losses inflicted upon him by the error of the referee, but we have been unable to do so. without sanctioning a practice which would lead to the greatest abuses.

Vote on Trial and Judgment by Beeeree.

Much confusion frequently arises in practice from lack of Attention to distinctions in respect to the effect of a referee’s report, which we have inherited, and are probably inherent in the present practice, under the merger of procedure-in law and equity cases.

At common law—that is to say, irrespective of any special statutory authority—the parties to a cause may agree upon a reference to try the issues, and such an agreement is not an .arbitration, taking the cause out of court, if the agreement

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includes authority to the clerk to enter judgment upon ¿the report in conformity with the report. Heckers v. Fowler, 2 Wall. 123 , 127 ; Bowie v. Borland, 68 Cal. 233 . And if there is a statute provision to such effect, special provision for the entry of judgment is not necessary in order to authorize the clerk to enter it.

The Code of Civil Procedure expressly provides that where all the issues are referred to hear and determine, the report upon the trial of the whole issue must direct the judgment to he entered thereupon. § 1022. This judgment may be •entered by the clerk without special application to the court, provided it be entered in precise accordance with the directions in the report.

The settled practice is, to enter such a judgment with the same caption and conclusion as if directed in open court, and the date of the caption is usually that of the entry, even though the entry be made in vacation. See as to the significance of the date of an order or judgment, 1 Abb. New Pr. & Forms, 246, 248, 272.

It has been thought by some that a more appropriate practice would be to entitle the judgment as entered upon a reference, but the other method has ample sanction of authority as usage. Hancock v. Hancock, 22 N. Y. 568 ; Terpening v. Holton, 69 Cal. 306 ; s. c., 12 Pacific Rep. 189 . The fact that the judgment is entered upon the report of a referee fully appears by the recitals. The fact that it is in legal effect a judgment of the court, is properly shown by the caption.

If the referee decides the whole issues,—that is to say, makes complete findings, adequate for final judgment—and fails merely to direct the jorm of the judgment, the court has power to supply the deficiency, and if necessary, by reason of the absence or disqualification of the referee or otherwise, will do so. It may do so either by itself framing the judgment ■or referring it to a referee to report a proper form of judgment. But properly viewed, this is not an assertion of the power of the court to finish the trial of a cause which the referee has not completely tried, but only an exercise of the power of the court to instruct the clerk as to what judgment is in legal effect directed by the report when the referee has

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fuljy tried the cause and fully reported, but merely failed to-prescribe the form in which the record shall show it.

Where the reference is to hear and determine, the court-cannot direct' a different judgment from that which the referee has directed. The function of the court in putting an informal report into the form of a judgment, is really in aid of the clerical functions of the clerk, not in aid of judicial functions of the referee.

Other principles, however, come into operation when the reference is not of the entire cause, to hear and determine, or when the referee decides merely the issues raised by allegations in the complaint and denials in the answer, at the same time leaving undetermined questions which result from the-determination of those issues, or otherwise are incidentally and necessarily involved in a final judgment. It is only final judgment which the referee can direct, with the same effect as a sanction for the act. of the clerk in entering it as if the-direction were given by the court itself.

In the practice of chancery, the cause was in theory always-decided by the court; and if a reference were had to a master, it was upon the theory that the assistance of the master was called in to aid in labors which were really labors of the-court; and the result of the master’s examination was laid before the court with the evidence. The judicial function of decision, and consequently the judgment, was wholly that of the court.

In equity causes under the Code, these two methods of procedure are both sanctioned and combined, with these ¡qualifications, (1.) that as to this latter class of special references, the report of the referee who succeeds to the place of the master, may be filed and notice given, and if no exceptions are taken within eight days, it will stand confirmed, without requiring the attention of the court; and (2.) that the court may, in its discretion, on ordering such a reference of a question not arising upon the pleadings, authorize the referee to hear and determine, instead of merely to hear and report to the court. § 1015.

These provisions of the law need careful attention, particularly in cases where an interlocutory judgment is desirable;

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and this may be the case now, in some common law actions, as well as in equitable actions. See on this subject, 21 Abb. N. C. 347 , note. Several modes of procedure have been pursued in such cases. Where plaintiff, moving for a reference, does not desire an interlocutory judgment, he usually takes an order referring the whole cause to hear and determine. This enables the referee, even though an accounting be found necessary by his determination upon the pleadings, to go on and state the account, so as to render a single final judgment.

When such an order is sought, it is not uncommon for the defendant to ask a direction for interlocutory judgment, requiring such to be had previous to the accounting, because this makes more clear his protection against being prematurely compelled to make discovery or to go into questions involved in an accounting, under the claim that they are relevant to the question of right arising on the issues. In some cases where his request for direction of an interlocutory judgment is not granted, the order of reference is so framed as to direct the referee to try first the issues arising upon the pleadings, and then, if he shall be of opinion that an accounting is required, to go on and take the account and direct final judgment. Such a direction as this is not regarded as altering the nature of the reference as a reference to hear and determine the entire cause, with power to direct final judgment and thereby authorize the clerk to enter it without application to the court, but rather as a distinct recognition of a well settled though often contested principle of equity procedure.

The court may, of course, itself try the issues on the pleadings, aud then order a reference of the accounting, or may refer the issues arising on the pleadings with direction to report as to interlocutory judgment, and may reserve the question how any remaining incidental matters shall be tried. Where this is done, it is clear, according to the decisions in the text, that judgment is not to be entered clerically by the clerk upon the filing of the report, but is to be directed by the court; and the same principle applies where a referee having power to proceed and conclude the trial, and direct the entry of judgment, pauses in h's work and directs an interlocutory judgment.

Cases cited

Heckers v. Fowler 2 Wall. 123 SCOTUS at 127 p. 9
Bowie v. Borland 68 Cal. 233 Cal. 1885-12-23 p. 9
Hancock v. Hancock 22 N. Y. 568 N.Y. p. 9