Douglas v. Smith

—This action was brought to compel an accounting on behalf of all creditors by Smith, as assignee of Benjamin M. Harris, and for a distribution among the creditors, and for the discharge of the assignee. By an interlocutory' judgment a reference was ordered which directed the referee to pass upon the claims of creditors, and also directed “ that the fees and expenses of the said referee be charged upon and paid out of the funds in the hands of Frederick H. Smith, as such assignee, unless otherwise directed by the court or said referee.”1 It appears that the reference was closed February 16, 1892, that

Section 1019 of ‘the Code provides that “ the referee's written report must be either filed with the clerk or delivered to the attorney for one of the parties within sixty days from the time when :the cause or matter is finally submitted; otherwise, either party ■may, before it is filed or delivered, serve a notice upon the attorney for the adverse party that he elects to end the reference. * * * In such a case * * * the referee is not entitled to any fees."

It will thus be seen that if neither party takes up the report, the referee must file it with the clerk within sixty days. It being conceded that it was hot so filed, the question presented is as to whether the facts show that within the meaning of this section it was delivered-to the attorney for one of the parties within the time so as to take away the right to terminate the reference.

We think that a compliance with this section demanded an unqualified delivery of the report so that it should be, as stated in Birdseye v. Goddard, 17 Weekly Digest, 228, “subject to the control, use and disposition of the attorney who received it.” Here the report was delivered upon an assurance that it should not be filed until the referee’s fees were paid. Thus it will be seen that the delivery, if delivery it can be called, was a qualified one, being merely entrusted to the custody of the counsel for the plaintiff upon the express condition that no use should be made of it until the fees were paid. We do not ‘think that this 'was sufficient.

The suggestion that, notwithstanding the promise made not to file the report until the referee’s fees were paid, it was still left in the physical power of the attorney to file the report on the day it was delivered, does not hplp respondent’s contention, because it would be recognizing that what at best was but a qualified delivery could be converted into an absolute and unconditional delivery of the report by sanctioning what would practically amount to a violation of a condition and a breach of trust. The report, therefore, not being either filed or delivered within sixty days, as provided by the Code, it was within the power of any of the parties, which was availed of by the appellant here, to terminate the reference.

The learned judge below was no doubt impressed with the same •suggestion that has been urged upon us, that the provision of the interlocutory judgment which has been quoted above, requiring

To this two answers may be suggested: First, that if the reference has been terminated, the referee is not entitled to fees; and,. second, that the construction placed upon the terms of the interlocutory judgment by the respondent is not in our opinion the correct one. We think it exceedingly doubtful as to the power of the court to adjudge, except perhaps as a condition for a favor granted, that a party other than the one succeeding upon a reference should be compelled to pay the referee’s fees and take rrp the.report. The judgment here does not in terms, nor by fair implication, require that in the first instanceQthe assignee should pay out of the fund in his hands the referee’s fees; nor does it change the rule that upon the successful party paying the fees he shall be entitled, in addition to any other recovery, to a judgment for such fees. In other words, the interlocutory judgment here provides what in the absence of such provision the law would supply, namely, that the judgment to be entered upon the report of the referee on the accounting should, in addition to the other relief, provide for the payment by the assignee out of the funds in liis hands, either to the referee, in case he had filed the report, or to the one who had taken up the same and paid the fees, the amount thereof. ¡>

We do not think, therefore, that the interlocutory judgment decreed that the assignee should in the first instance take up the report and pay the fees; nor do we think it at all clear that the court had any power in a summary manner, such as this upon a. motion, to so compel the assignee. Without, however, directly passing upon this question, we think, for the reason first assigned,, that the reference had terminated, and the referee had thus lost, his right to the fees, the assignee could not be compelled to pay the same, and that the order to that extent was erroneous, and should be reversed, and motion denied, with ten dollars costs and disbursements. “

Van Brunt, P. J., concurs.