Batchelor v. Albany City Insurance — 31 N.Y. Super. Ct. 346

Majority

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CHARLES BATCHELOR, Plaintiff and Appellant, v. THE ALBANY CITY INSURANCE COMPANY, Defendants and Respondents.

Headnote

A compulsory reference, under subdivision 1 of section 271 of the Code, may be ordered, whenever it appears that the trial of any one of the issues will involve the examination of a long account, although the determination of some other issue may render it unnecessary to try the first-named issue at all.

Whether the whole of the issues shall be referred, or the taking of the account merely, and whether the account shall be taken before the trial of the other issues, or after, are matters, in the discretion of the Court at the Special or Trial Term, to be governed by the particular circumstances of each case.

If there is any evidence laid before the Court below, that the examination of a long account will be required, and that evidence is uncontradicted, or if there is a conflict of proofs created by counter affidavits, then the determination of the Court below must be held final and conclusive.

Hence, held that an action brought for the recovery of the amount insured by an insurance policy, in which the proofs of loss consist of numerous items, may be referred.

The adjudged cases, and the history of legislation upon this subject since the first publication of the Revised Statutes, reviewed.

Before Barbour, C.J., Fithian and Freedman, JJ.

Decided June 11, 1869.]

This was an appeal from an order made at Special Term by Mr. Justice Jones, directing the issues in the action to be referred for trial.

The action was to recover damages for injury to furniture and other articles insured by a policy of insurance issue'd by the defendants.

A reference was ordered on the ground that the trial of the action involved the examination of a long list of articles, constituting it an account under section 271 of the Code.

From this order the plaintiff appealed to General Term.

Mr. John A. Weeks for appellant.

The trial of the issues will not .require the examination of a

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long or of any account in the sense in which that word is used in the section of the Code which authorizes a reference in certain cases.

To constitute an account in the sense of that section, there must he both debit and credit items (5 Bos., 236 ; Van Rensselaer v. Jewett, 6 Hill, 373 ; 6 Wend., 503 ; 25 Wend., 687 ; Silmser v. Redfield, 19 Wend., 28 ). In McMaster v. Booth ( 4 How., 428 ), Judge Bareulo defines an account to be “ a computation or statement of debts and credits, arising out of personal property bought or sold, services rendered, materials furnished, and the use of property hired and returned ” (Keeler v. Poughkeepsie and S. P. P. R. Co., 10 How., 11 ). “ A commutation of debt and credits between the parties” is necessary to constitute an account. The examination of numerous items of damage does not constitute an account between the parties within the meaning of that term (Dewey v. Field, 13 How., 438 ; McCullough v. Brodie, 13 How., 347 ; 18 How., 213 -311; 9 Abb., 436 ; Ross v. The Mayor, &c., 2 Abb. N. S., 266; Swift v. Wells, 2 How., 79 ; Miller v. Hooker, 2 How., 171 ; Freeman v. Atlantic Mut. Ins. Co., 13 Abb., 124 ; McLean v. East River Ins. Co., 8 Bos., 700 ; Sharp v. The Mayor, &c., 18 How., 213 ; McCullough v. Brodie, 13 How., 346 ).

The requirement of the policy that the assured should deliver a particular account of such loss and damage signed and verified, &e., is the ordinary form of policies of insurance. The use of this phrase, “ particular account ” does not bring the cause within section 271 of the Code, as the'word “account” is used in the policy and in Section 271 in two entirely distinct meanings which belong to it.

Besides, difficult questions of law are involved—the effect of the indorsement on the policy, “ loss, if any, payable to Charles Batchelor as owner,” which plaintiff claims entitles him to recover in his own right under the authority of Solmes v. Rutgers Fire Ins. Co., (8 Bos., 578), while defendants, under authority of Grosvenor v. The Atlantic Fire Ins. Co., 17 N. Y., 391 , claim that they are discharged from all liability; also the questions of the" sufficiency

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of the proof, the conformity to the various requirements of the policy. There is no affidavit that the examination of any account is involved in the issues (Dedrick’s Admrs. v. Richly, 19 Wend., 108 : Cameron v. Freeman, 10 Abb., 334 : Graham v. Golding, 7 How., 260 )

The plaintiff is entitled to have these issues tried by a jury, and these questions of law decided by the judge presiding at such jury trial, and the judge below had no power to order a compulsory reference against plaintiff’s opposition (Dickenson v. Mitchell, 19 Abb., 286 ; Harris v. Mead, 16 Abb., 267 ; Goodyear v. Brooks, 4 Rob., 682 ).

Mr. George W. Parsons for respondents.

' • There appear to be but two generic issues involved in the pleadings; all other questions appear to be collateral to those.

1. As to the real ownership of the property claimed to be covered by the policy.

2. The question as to the amount and.value of the property lost.

Those issues depend upon questions of .fact; there are no dif•ficult questions of law involved; and the principal inquiry of fact evidently is as to the loss and value of numerous items of merchandise; and the defendants have a right to extend the inquiry as to value to every item claimed to be lost or damaged.

There is a wide difference between the Revised Statutes and ’ the Code in respect to references. By the former only cases “founded on contract ” could be referred (2 R. S., vol. 2, p. 480, 3d ed.). Under the Code any action may be referred if the “trial of an issue of fact require the examination of a long account on either side ” (Code, sec. 271).

Even where the action or defence is founded on a fraud it may be referred (Sheldon v. Wood, 3 Sand., 739 ; McMahon v. Allen, 10 How., 384 ).

By the Court:

This' is an appeal from an order made at •Special Term referring the issues in this action to a referee to

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hear and determine the sanie, for the reason that the trial of the action involves the examination of a long account within the meaning of section 271 of the Code. The appellant insists that this is not a case in which a reference can be ordered against his objection. It is indeed strange to find that, notwithstanding the books are full of cases in which the question of the power of the Court to order a compulsory reference has been discussed, and an attempt made to solve and settle it, it has never, either before or since the Code, been clearly and distinctly determined what constitutes a long account within the meaning of the law. A review of the adjudged cases usually cited upon this point, as well as the history of legislation upon the same subject since the first publication of the Eevised Statutes, will be found highly interesting. I shall omit, however, to discuss the question in its constitutional aspect, as this point has neither been argued nor raised in the case under consideration. At the time of the publication of the Eevised Statutes in 1829, section 39 of the statute authorizing a reference in certain cases read as follows:

“ Sec. 39. Whenever a cause shall be at issue in any court of record, and it shall appear that the trial of the same will require the examination of á long account, on either side, such court may, on the application of either party, or without such application, order such cause to be referred to three impartial and competent persons.”

The next section of the same statute provided for the appointment of referees, as follows:

Sec. 40. If the parties agree on three persons as referees, such persons shall be appointed by the court; if they disagree, each party shall be, entitled to name one, and the court shall appoint the persons so nominated, if they are free from all exceptions, and such other person as .the court shall designate.”

Section 46 prescribed that all the referees must meet together and hear all the proofs and allegations of the parties together, but a report of any two of them shall be valid.

By chapter 499 of Laws of 1836 it was enacted that, in any

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cause which may be referred to referees, it shall be the duty of the court or judge ordering the reference, with the-consent of the parties, to appoint such one person as sole referee therein, as -may be agreed on by said parties. ' .

With the exception of this single change the statute remained unaltered as above until 1845; and so far from restricting the power of reference to matters of account alone, did not even confine it to actions arising ea> contractu. In practice, however, the courts seem to have confined it to such actions. ' In Thomas v. Reab ( 6 Wend., 503 , decided in 1830), which was an action for the recovery of damages’ for breaches of various covenants, Sutherland, J., held: “It may well be that the trial of a cause in an action of covenant may require the examination of a long account, but this is not such case.”

Silmser v. Redfield ( 19 Wend., 21 , decided in 1837) decides simply that actions of tort are not referable, although it is true Kelson, Oh. J., gives it as his opinion that the statute only applies to eases where accounts, in the common acceptation of that term, may exist, and require examination. - '

The' case of Levy v. The Brooklyn Fire Insurance Co. ( 25 Wend., 687 , decided 1841) involved charges against the plaintiff: (1) That he had fraudulently caused the conflagration by which the property insured was injured, and (2) that in making up his statement of loss he had fraudulently overestimated the amount of his loss; and for these reasons the Chief-Justice said that/ without attempting to lay down a/ny general rule as to the reference of actions on policies of insurance, he was of the - opinion-that in a case involving such serious charges a party was entitled to the benefit of a trial before a court and jury.

In Van Rensselaer v. Jewett ( 6 Hill, 373 , decided 1844), which was an action for the recovery of nine years’ rent, Bronson, J., vacated the order of reference upon the ground that the defend-ants rested their enti/re defence on the ground that they were never liable for any rent, and that for this reason no account between the parties, in the ordinary acceptation of the term, was involved.

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■ The foregoing cases, and a report consisting of less than three lines of the case of Parker v. Snell ( 10 Wend., 577 ), to the effect that the Court refused to refer the cause, because there were but four items in the account, constitute the groundwork upon which the claim has since been, founded, that not only must there be a long account, but that it must be a mutual account between the parties; although the fact, that the statute did not restrict the power of reference to actions arising ex contractu, was distinctly-recognized by Cowen, J., in Lee v. Tillotson ( 24 Wend., 338 , decided 1840).

By chapter 163 of Laws of 1845 the statute was changed, however, so as to apply only to “ causes founded xt/pon contract,” in which the trial, or the assessment of damages, will require the examination of a long account on either side. After the statute had been thus amended, but before the passage of the Code, the following two cases were decided, without reference, however, to the change introduced by the act of 1845, to wit: Swift v. Wells ( 2 How., 79 ), and Miller v. Hooker ( 2 How., 171 ). In the first-named of said cases, which is constantly cited in support of the theory therein advanced by Bronson, Ch. J., that one bill of goods, containing fifty different items, delivered at the same time, is in fact but one item, the gross amount of the bill was agreed upon at the time of sale, the defendant had no set-off of any kind, and the only question raised was as to payment; and in the second case, it was held, upon the authority of the preceding case, simply that an action founded upon one bill of lading containing eleven items did not require the examination of a long account.

Section 226 of the Code as passed in 1848, and section 271 of the amendatory act of 1849, conferred authority upon the Court to direct a compulsory reference in any case, among others, where the trial shall require the examination of a long account on either side, and this power the courts have retained ever since. It will be seen that section 271 of the Code is again made broader in its terms than the provisions of the Revised Statutes, as amended in 1845. The latter provided for the ap

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pointment. of referees in actions founded on contract only, while the Code authorizes a reference in all actions whatever involving the examination of a long account, and it has consequently been held by this Court, in Sheldon v. Wood ( 3 Sandf., 739 ), with the concurrence of the entire Court, that the Court has power to order a reference in actions sounding in tort, where the trial of the issues of fact does require the examination of a long account.

The cases under the Code, which, upon a mere inspection, may appear to have been differently decided, will be found on careful examination to contain peculiar features and to rest upon peculiar facts, and that the question actually decided in them is to the effect only, and goes no farther than that the examination of a long account within the meaning of section 271 is not involved therein, but that they do not determine what is such account. They are, therefore, not in conflict with the decision of Sheldon v. Wood, supra.

In the same manner, it will be found that in several case's arising oh contract, a reference has been refused, either because the account involved thei’ein was not sufficiently long to warrant a reference, or because the examination of the account was not directly involved therein; but this class of • cases also fails to establish a rule by which it could be determined what does constitute a long account, and, according to which a decision of the Oom’t below upon this point, could be reviewed at the General Term.

The most important cases in which a reference has been denied are:

McMaster v. Booth ( 4 How., 428 , decided in 1850). This case simply decides that an action of negligence cannot be referred, notwithstanding Barculo, J., in making the decision, adopts as the basis for it the language of Nelson, Ch. J., in Silmer v. Redfield, supra.

Draper v. Day ( 11 How., 439 ), that an action to set aside an assignment for the benefit of creditors, on the ground of fraud,is not referable.

Dewey v. Field ( 13 How., 437 ) was an . action against the

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sheriff for the recovery of damages for a false return to an execution.

McCullough v. Brodie ( 13 How., 347 ; 6 Duer, 659 ) was an .action for damages for false representations.

Sharp v. the Mayor, &c., of New York ( 9 Abb., 426 ), same case ( 18 How., 213 ), affirmed on appeal ( 31 Barb., 578 ), was an action for damages for a misrepresentation, and the affidavit upon which the order of reference was granted was clearly insufficient, for the reason that it merely recited that the trial of the action would occupy a long time, and that a number of separate and distinct facts would have to be proved, by a large number of witnesses.

The case of Ross v. the Mayor, &c. ( 32 How., 164 ; 2 Abb., N. Y., 266), decides only that in an action brought to recover damages not arising out of contract, á reference cannot be ordered, even though the items of damage, which are to be examined, be ever so numerous. -

In Stevenson v. Buxton ( 37 Barb., 13 ; 15 Abb., 352 ) it was held that ;n an action for specific performance, where the fact that the defendant never had title, and was not and never had been able to specifically perform, is set up in the answer, and is proved on the trial at Special Term, a compulsory reference cannot be ordered to assess the damages, but the case should be sent to the Circuit for trial.

In Dickinson v. Mitchell ( 19 Abb., 286 ) five items in plaintiff’s bill of particulars were held not to be sufficient to constitute a long account.

Harris v. Mead ( 16 Abb., 257 ) was an action for plumbing work. Substantially there were but two items, and five items of extras of trifling amount, with one exception. The Court, simply held it not to be “ a ease for a reference.”

The case of Goodyear v. Brooks (4 Robertson, 682) turns upon the peculiar issues raised by the pleadings. !

In Cameron v. Freeman ( 18 How., 310 ; 10 Abb., 333 ) it was held, at Special Term, that a reference against the will of the parties cannot be ordered, unless the issues in the action involve

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directly, and not merely incidentally, the examination of a long 'account. Several other similar cases may be found, which hold, without denying the power of the Court, that it is improper to refer a case, where it may become only collaterally important to examine into a long account, but these I cannot stop to consider.

In the following cases, among others, a reference was ordered upon the ground that the examination of a long account was involved :

In Masterson v. Howell ( 10 Abb., 118 ) it was held, by .Hilton, J"., that an action to recover compensation for indorsing, for defendant’s accommodation, notes exceeding twenty in number, is properly referable as requiring the examination of a long account..

In Jackson v. De Forrest ( 14 How,, 81 ) a receiver was appointed and reference ordered upon the Court’s own motion to determine the whole- issue.

In Atocha v. Garcia ( 15 Abb., 303 ), being an action to recover the value of board and lodging, Monell, J., ordered a reference, notwithstanding the complaint contained allegations of fraud, which constituted a ground of arrest, and the defendant -had been arrested' thereon.

In Hatch v. Wolf ( 30 How., 65 ; 1 Abb., N. S., 77), which was an action to recover damages for a breach of covenant to keep premises in good and. tenantable repair, the Court of Common Pleas, at General Term, upheld the order of reference.

in delivering the opinion of the Court, held: That the order directing a reference upon the ground that the action required the examination of a long account, is not an order affecting the merits, or which involves a substantial right, and is not appealable (citing Dean v. Empire Mut. Ins. Co., 9 How., 69 ; Bryan v. Brennan, 7 How., 359 ; Ubsdell v. Root, 7 Hilton, 173); and if the action is one in which a reference may be ordered, the order of the judge at the Special Term, whether the examination of a long account is or is not involved, is not one which the Court will reverse on appeal (citing Smith v. Dodd, 3 E. D. Smith, 348; Kennedy v. Hilton, 1 Hilton, 546).

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In Mills v. Thursby ( 11 How., 113 , No. 1) a general reference was ordered, although the examination of an account formed only a. principal part of the issue. Mitchell, J., held that, although the question of partnership or no partnership, alone, is a proper one to he decided by a jury; yet where it is so connected with the accounts of the firm as to require an examination of them, the cause should be referred.

That an action upon a policy of insurance may be referred, if it involve the examination of a long account, has been distinctly held in Samble v. the Mechanics’ Fire Insurance Company ( 1 Hall, 560 ).

In Lewis v. The Irving Fire Insurance Company, and same v. The Fulton Fire Insurance Company ( 15 Abb., 303 , note), Scrugham, J., granted the motion to refer, although the answer not only denied that the plaintiffs lost hv the fire the goods claimed to have been lost, hut charged fraud upon the plaintiffs in making claim for more goods than they lost, &c.

In Dean and wife v. The Empire State Mutual Insurance Company ( 9 Hów., 69 ), being an action upon two policies of insurance, executed by the defendants to Mrs. Dean, it was held by Watson, Wright, and Harris, JJ., that, although the answer contained not only a denial of the value of the property, and- of Mrs. Dean’s ownership, but also an averment that part of the property belonged to Hoah S. Dean, and that he had made, in the application for insurance, false and fraudulent statements which rendered the policies void, the' Court at Special Term having decided, however, that the action involved the examination of a long account, it was referable, and that the decision of the Special Term ought not to he reviewed upon appeal.

Finally, it should not be overlooked that several sections of the Code refer to different kinds of account. Section 158, in prescribing the manner of pleading an account, refers to an account and a “ further account” generally. Section 95, in prescribing that, in an action brought to recover a balance of an account, the cause of action shall he deemed to have accrued from the time of the last item proved in the account on either side, expressly

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limits the operation of the section to “ mutual, open, and current accounts, where there have been reciprocal demands between the parties;” while section 271 applies to any kind of an account .which may exist on either side, provided it is a long one. The cases of Peck v. United States and Liverpool Mail Steamship Co. ( 5 Bosw., 226 ), Green v. Ames ( 14 N. Y., 225 ), and Hallock v. Losee (1 Sand., 220), have reference only to the account defined by section 95.

Therefore, in view of the fact that a review of all the cases bearing upon the point under consideration, and a comparison of the decisions therein made with the facts of each case, discloses not only the inexpediency but the almost utter impossibility of supplying the want of a statutory definition of the term “ long .account on either side,” by a judicial construction to be followed in all future cases, I shall not attempt to determine the meaning of these words, but will content myself to decide the case under consideration in accordance with the rule laid down in Whittaker v. Desfosse ( 7 Bosw., 678 ), by five of the judges of this Court, sitting in General Term. In this case the language of Justice Edmonds, in Gray v. Fox (1 Code R., N. S., 334), was criticised as an extreme view of one side of the question, and the remark of Justice Dean, in Keeler v. the Poughkeepsie Plank Road Co. ( 10 How., 11 ), as an unwarranted limitation of the power to refer on the other hand, and held that it is sufficient if it appear that the trial of any one of the issues will involve the examination of a long account, although the determination of some other issue may render it unnecessary to try the first-named issue at all; that whether the whole of the issues shall be referred, or the talcing of the account merely, and whether the account shall be taken before the trial of the other issues, or after, are. matters in the discretion of the Court, at the Special or Trial Term, to be governed by the particular circumstances of each case; and it was consequently further held, in the last-named case, that if .there is any evidence laid before tire Court below that the examination of a long account will be required, and that evidence is uncontradicted, or if there is a

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conflict of proofs created by counter affidavits, then the determination of the Court below must be held final and conclusive, and this is the meaning and intent of the cases.

In the present case the motion for a reference was made and heard on the pleadings, and proofs of loss submitted by the plaintiff. The proofs of loss consist of one hundred and forty-five items of goods consumed by fire, of the alleged aggregate value of eleven thousand one hundred and twenty-seven dollars and twenty-four cents, and of forty-nine items' of goods saved from the fire, but damaged to the extent of two hundred and sixty-three dollars. This particular account of such loss and damage, the plaintiff was, by the terms of his policy, bound to render to the company, and the policy provided further that the amount of the loss or damage shall be paid sixty days after the receipt of said account. This particular account, therefore, as has been truly said by the learned justice who ordered the reference, is an essential element in the cause of action, and forms a part of the basis of the action; for, until it is rendered, no cause of action exists, and, when rendered, it limits and controls the recovery; and the said justice, upon the proofs before him, having found and decided that the account in question is a long account, within the meaning of section 271, that no difficult questions of law are involved, and the allegations of the answer being insufficient to raise an issue of fraud, the order appealed from should not be disturbed. I will conclude by stating that I did not fail to examine the cases of McLean v. the East River Ins. Co. ( 8 Bosw., 700 ), and Freeman v. the Atlantic Ins. Co. ( 13 Abb., 124 ), but that my views have not been changed thereby. In the first-named of these cases, a reference was refused at the Special Term on the sole ground that part of the defence was fraud on the part of the insured; and I must assume that the fraud was charged and averred in such form as to compel a determination of the question on the trial upon the evidence given in support of it. In the case last referred to, the Court, at General Term, it seems, did not deny the power of the justice at Special Term to order a reference in that particular case; but simply held,

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“ As the whole defense in this case rests upon the alleged fraud of the plaintiff, in not putting the goods on board, and also that the vessel was intentionally wrecked, and as both issues involved directly a charge of fraud, we do not thinh the case should have ieen referred; such questions are properly to be tried by a jury.”

The order appealed from should be affirmed with ten dollars costs.