Shrady v. Van Kirk — 77 A.D. 261

Majority

p. 261

George F. Shrady, Appellant, v. Anna B. Van Kirk and Others, Respondents, Impleaded with Others.

Headnote

"Will—provision directing a sale—presumption when it does not provide for taking back a bond and mortgage—reference to hea/r and determine — the court cannot direct that a judgment entered upon the refereds report shall contain a 'provision, not authorized thereby, that apart of the proceeds of a sale may be secured by a, bond and mortgage—remedy where such a provision is inserted.

A will, which directed the testamentary trustees to sell the testator’s realty, was silent as to whether the sale should he made wholly for cash or partly on bond and mortgage. In an action brought by a beneficiary under the will to compel the sale of the real estate and to obtain other relief, the issues were referred to

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a referee to hear and determine. The referee filed a report directing a sale of the realty, but did not specify whether the sale should be made for cash or on credit. After the filing of the referee’s report the referee approved, as to form, a judgment which recited that the realty should be sold in separate parcels “with the privilege of allowing sixty per cent of the purchase money to remain on bond and mortgage for two years.” Thereafter the court at Special Term directed the entry of a judgment in conformity with that approved by the referee. The plaintiff then moved to correct the judgment by striking therefrom the provision that sixty per cent of the purchase money might remain on bond and mortgage for two years.

Upon an appeal from an order denying such motion, it was Held, that the referee was functus officio when he approved, as to form, the proposed judgment submitted to him;

That the failure of the will to authorize a sale on bond and mortgage raised a presumption that it was the intention of the testator that the property should be sold for cash;

That, as the referee in his report had simply directed a sale of the real estate and thus followed practically the language of the will, it would be presumed that it was his view that the sale should be made solely for cash;

That the court had no power to insert the provision that a portion of the purchase money should remain on bond and mortgage for two years, as such provision was substantially different from that prescribed in the referee’s report;

That the practice adopted by the plaintiff for the correction of the judgment was regular, and that he was not obliged to seek relief by an appeal from the judgment.

"Van Brunt, P. J., dissented.

Appeal by the plaintiff, George F. Shrady, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of April, 1902, denying the plaintiff’s motion to correct a judgment theretofore entered in the action upon the report of a referee, because of certain alleged irregularities.

The action was brought by a beneficiary under the will of Maria Shrady, deceased, to compel the sale of a large amount of realty, for the removal of trustees, a settlement of their accounts, and other relief. The issues in the action were referred to a referee to hear and determine. His report was made on October 10, 1901,. and filed in the office of the clerk on Rovember 6, 1901. That report directed that the testamentary trustees should sell all such realty at public auction, but whether for cash, on bond and mortgage, on credit, or otherwise than cash, did not appear in such report. Subsequently upon notice, the referee, on January 11, 1902,

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approved a judgment as to form, wherein it was provided that such real estate should be sold in separate pareéis, “ with the privilege of allowing sixty per cent of the purchase money to remain on bond and mortgage for two years.” A motion was then made to confirm the report of the referee and for entry of judgment, and the court at Special Term directed the entry of judgment in conformity with the form of judgment approved by the referee which contained the provision quoted, that upon the sale of the property sixty per cent of the purchase money should remain on bond and mortgage for two years. Thereafter plaintiff moved to strike out this and three other provisions in the judgment, upon the ground that they were unauthorized and irregularly and improperly inserted, which motion was denied, and from the order so entered the plaintiff appeals.

_ Barclay E. V. McOarty, for the appellant.

S. B. Brownell, for the respondents Archibald M. Shrady and others.

Lowis F. Boyle, for the respondent Van Kirk.

Jacob Shrady, for the respondents John and Jacob Shrady.

The principal question for our consideration is as to the right and power of the Special Term, after a reference to hear and determine, to insert the provision permitting the sales upon bond and mortgage. Incidentally the question of practice arises as to whether such a provision, if improperly inserted, can be stricken out on motion as an irregularity, or whether the plaintiff’s remedy is not by appeal from the judgment. While the case was pending and the referee had jurisdiction over the action, he had the right, in connection with the making of his report and decision, to settle the form of the judgment, but after the report had been taken up and filed, the referee was functus officio and had no further jurisdiction for the purpose of deciding any issue involved in the action. If we are right in this view we are not aided in our consideration of the main question by the approval of the referee, two months after his report was filed, as to the form of the judgment, but must view the

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question precisely as though the referee, having the right to determine such form, had neglected to do so.

The question, therefore, narrows down to whether, upon the motion to confirm the report and settle the form of judgment, the court had the power to insert the provision allowing sales on bond and mortgage.

In Vagen v. Birngruber ( 9 N. Y. St. Repr. 729 ) it was said, “ the action being for equitable relief, the final judgment should have been a decree of the court, settled by the court, and entered upon its direction, the referee who tried the cause not having reported the form of a decree to be entered. Section 1228 of the Code in no way conflicts with this practice.” Here, however, the sales were to be made by testamentary trustees, and, therefore, necessarily under the provisions of the will; and the will directed a sale of the realty, but was silent as to whether it was to be sold entirely for cash or on credit, or otherwise than for cash. This being the situation, Ave think the general rule is applicable, that the failure to authorize a sale on bond and mortgage raises the presumption of an intention that the property should be sold for cash. Where a testamentary disposition has been made directing the sale of realty, the invariable rule is that the sale shall be absolutely for cash, unless otherwise distinctly specified, and not for bond and mortgage nor on any credit plan.

Whether this question was considered by the referee is not made to appear, further than that his report does not in terms do more than direct a sale of the realty, thus following practically the language of the will; and, seemingly, therefore, the presumption Avould follow that in his view the sale should be solely for cash. When the motion was made to the court, therefore, we think it was without power or right to insert the provision essentially different from this, and allowing the sale upon terms permitting the purchaser to give a bond and mortgage for sixty per cent of the purchase price. As said in Paget v. Melcher ( 26 App. Div. 15 ) : “ The action Avas referred to a referee to hear and determine, and his report was made directing the judgment to be entered. In that case the report stands as the decision of the court (Code Oiv. Proc. § 1228), and by the provisions of that section the clerk was required to enter judgment upon it when its form has been settled by the referee.

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Although it has been deemed necessary in this department that there should be a direction of the court for the entry of the judgment, yet when entered it must be the one directed in the report of the referee; and the court at Special Term, when a motion is made for leave to enter the judgment, has no power or authority to give directions which shall require the entry of a judgment substantially different from that prescribed in the report of the referee. (Kennedy v. McKone, No. 2, 10 App. Div. 97 .) The judgment to be entered upon this report is to be reviewed in the same way as one entered upon a decision of the court, for the report has the same effect precisely as such decision. The manner in which it is to be reviewed is prescribed in section 1022 of the Code, and no authority is given to the court at Special Term to change or alter the directions given by the referee as to the entry of judgment. The application for judgment upon the report which is made to the court at Special Term is not for the purpose of a review of the correctness of the findings of the referee, but simply to furnish an assurance of regularity in the manner of entering the judgment and to enable all parties to know that the judgment as entered conforms to the one directed in the report. There was, therefore, no authority in the Special Term to modify the conclusions of law found by the referee so as to enter a different judgment than that directed in the report.”

We have already adverted to the fact that the referee, after he ceased to have control over the action, was of opinion, as appears from his approval of such provision in the form of judgment, that it should be inserted ; but this does not aid us, because, as stated, when he expressed such approval he was fumctus officio, and, therefore, it is as though he had not attempted to exercise that power. It was the duty of the referee to decide every material question involved in the litigation, and he had no power to relegate or return any such question for decision to the court. The question as to whether under the terms of the will the property could be sold otherwise than for cash, involving as it did a construction of that instrument, was a material one ; and it needs no argument to support the view that the referee could not refuse to pass upon such a question and then refer it back to the court. There is certainly no provision of law which gives a referee the right to confer

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jurisdiction, on the court to dispose of some untried question which was before him on the reference to hear and determine. It was his duty to try and dispose, as we have said, of all the material questions; and upon the return of his report to the court, all that remained was for the court to settle the form of the judgment accordingly. This, however, gave no power to the court to add to or take away from the judgment in a material respect, and the attempt to do so is a clear irregularity.

We have thus reached the conclusion that the court exceeded its power in inserting any such provision in the judgment. The question remains, however, whether the practice pursued by the plaintiff was right in moving to strike out the provision as irregular, or whether his sole remedy was by appeal from the judgment. Under the authorities to which we have adverted, we think the practice followed was right. As said in Corn Exchange Bank v. Blye ( 119 N. Y. 414 ) : .“We think the decisions are uniformly to the effect that when an error has been made in respect to the form of the judgment by which its scope or amount has been enlarged or increased beyond that plainly authorized by a verdict, referee’s report or decision of a court, a question is not presented for the consideration of the court on appeal; but the error must be corrected if at all, by motion in the court of original jurisdiction.” ' It follows accordingly that the order appealed from should in this respect be reversed.

In regard to the three other alleged irregularities we need add nothing to what was said by the learned judge in disposing of the motion at Special Term.

The order appealed from should accordingly be reversed, and the motion granted to the extent indicated, and in all other respects affirmed, without costs to either party on this appeal.

McLaughlin and Laughlin, JJ., concurred ; Van Beunt, E. J., dissented.

Order reversed and motion granted to extent stated in opinion; in all other respects affirmed, without costs to either party.

Cases cited

Corn Exchange Bank of Chicago v. Blye 119 N. Y. 414 N.Y. 1890-02-25 p. 266