Case ID: abb-pr_9/html/0141-01.html
Source: Caselaw Access Project
Author: {"author": "Bosworth, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE ACCESSORY TRANSIT COMPANY a. GARRISON.
    
      New York Superior Court;
    
    
      Special Term, September, 1859.
    Teial.—Reference.—Receiver’s Motion.—Costs.
    The fact, that on a trial before a referee, adjournments were not formally made from one hearing to the time of another, does not render the proceedings irregular, if both parties gave all the testimony they desired, and submitted the cause on such testimony.
    A receiver having been appointed of the property of a corporation, just after the referee in an action in which the corporation was plaintiff, had after trial reported in favor of the defendant in that action, and judgment having been entered on the report, the receiver moved to vacate the judgment and report, and the order of reference, on the ground, among others, of an alleged collusion between the officers of the corporation and the defendant in obtaining a report against the corporation; but on the motion, the charge of collusion was not substantiated.
    
      Held, on denying the motion, 1. That as there was no reason for doubting the good faith of the receiver in making the motion, it should be denied without costs.
    2. There was no reason for ordering a reference to ascertain whether the report was fraudulent, for the receiver should be left to his action.
    
    
      Motion to vacate order of reference and report of referee, and judgment entered thereon.
    This action was commenced by the Accessory Transit Company in 1857. The plaintiffs’ claim amounted to nearly a million of. dollars, and was founded on charges that the defendant, while acting as their agent, had defrauded them by false accounts and vouchers.
    The cause was referred to W. K. Thorne, Esq., as referee to hear and determine the same. Further tacts are stated in the opinion of the court.
    
      John Sherwood and J. FT. Taylor, for the motion.
    
      I. T. Williams and F. B. Cutting, opposed.
    
      
       Pettigrew a. The Mayor, &o., or New York (2F. Y. Superior Court; Speáal Term, June, 1859).—Order to show cause why judgment entered for the plaintiff on the report of a referee should not be set aside.
      The facts are fully stated in the opinion.
      
        M. Busteed, for the motion.
      G. Bean, opposed, insisted that as there was no pretence that the plaintiff had altered the contract himself, and it had always been in possession of the defendants, the latter was guilty of laches in not producing such evidence before the referee, and that they were now estopped.
      Hoffman, J.—The plaintiff recovered a judgment against the defendants on the 15th of January, 1859, for the sum of $25,700.28, besides costs. About $17,765 of this amount was for the performance of a contract for regulating Sixty-third-street, between Fifth and Sixth avenues.
      The contract on which this part of the claim was founded was dated .the 26th day of November, 1852, and in the copy annexed to the complaint, provided for payment for the work as follows :
      “ For all work which shall be blasted, and broken to' a suitable size for carting, including its removal and deposit in embankment, the sum of sixty cents per cubic yard shall be paid, and twelve cents per cubic yard for earth excavated, and forty-two cents per cubic yard for earth filling; culverts, per running foot, SI."
      The plaintiff sued the defendants upon this alleged contract, alleging performance of the work as stipulated, and demand and refusal of payment.
      The defendants, by answer, insisted upon the fact of a discontinuance of the work contracted for, upon the ground being taken for the Central Park, and notice of such discontinuance being given.
      The case was referred, was litigated, and judgment given in favor of the plaintiff, from which no appeal has been taken.
      It is therefore sufficient to observe, that if the referee was wrong upon the point contested and Redded by him, the error cannot now be redressed ; plainly it cannot be done in this mode.
      The present application is made upon the ground that the original bid of the plaintiff was twenty-two cents per cubic yard for the earth filling, instead of forty-two cents ; that the original record of the contract made in a book kept in the street-commissioner’s office has been altered by an erasure of twenty and substitution of the word/orty; and that it appeared by a copy of the estimates transmitted to the Common Council by the street-commissioner, October 29,1852, stating his award to the plaintiff of the contract, that twenty-two cents was the actual amount.
      By that document the then street-commissioner reported that the contract was awarded to the plaintiff as the lowest bidder. It appears upon its face that the bid of the plaintiff was for excavating earth, per cubic yard (250 yards), twelve cents ; for filling earth, per cubic yard (35,000 yards), twenty-two cents ; for excavating and removing rock per cubic yard (500 yards), sixty cents ; and for culverts, per running foot (180 feet), $1 per foot. The aggregate of the bid amounted to $8197.
      There were thirteen other bidders, whose offer for the filling earth per cubic yard varied from thirty cents to sixty-nine cents, Four of these offers were from forty-nine cents upward. The lowest aggregate of the other bidders was $10,650. The highest was $24,806.50.
      The additional charge of twenty cents upon the earth filling of 35,000 yards would add $7000 to the above amount of the plaintiff’s offer, making it $15,197. Four of the offers would, then, exceed it in the aggregate, the lowest of such four being $17,832.60.
      It is sworn to, and not contested, that the habit of the plaintiff in every extensive contract of a similar nature with the corporation, was not to take a copy of the contract; that he did not do so at this time ; that he or his attorney obtained the copy annexed to the complaint, upon commencing the action, which was certified by the deputy street-commissioner. The contracts are entered in a book kept in the office.
      It is also shown, that upon the trial the original book was produced in evidence before the referee, and produced by the plaintiff’s attorney.
      The plaintiff, in his affidavit to oppose the present motion, denies any knowledge, information, or suspicion of any alteration in the contract, “ or that it was not in exact accordance with his bids for the said work,” until he saw the communication of Mr. Lowell of the 21st day of February, 1859 ; that he has no knowledge or suspicion of the person by whom the alteration was made, if any was made ; that the contract was never seen by him since its execution ; that he has no copy of his bid, nor has he seen it since it was deposited, nor has he ever seen the original bids of his competitors ; that if the same have been abstracted from the office, it was without his knowledge or privity. That he does not know what his bid actually was for such work ; that he supposed at the time of the commencement of this action that the assessment of said work had been made in accordance with the bid under which the contract had been awarded to him, and that he has no knowledge to the contrary now.
      That for thirty years he has had such contracts with the defendants, and never been in the habit of retaining copies of his bids or contracts, but to rely on the original records.
      He further says : “ That the price contained in said contract for said work is now as it was at the time of its execution by him, as he verily believes ’ and he states positively, and of his own knowledge, “ that no alteration, change, or erasure has ever been made therein by deponent, or at his instigation, or with his privity or assent.”
      It appears also that the original bids cannot, after diligent search, be found in the proper office.
      Mr. Lowell swears to an inspection of the record of the contract, and his belief that the erasure and alteration were fraudulently made.
      The book was produced, and inspected by consent. It is sufficient to say that, with the affidavit, there is ground for inquiring into the fact, at least, if any further inquiry can be allowed in the case.
      By the Be vised Statutes, no judgment in any court of record shall be set aside for irregularity on motion, unless such motion be made within one year after the time such judgment was rendered. (2 lieu. Stats., 359, § 2.)
      The Code (§ 174) is more comprehensive : “ The court may, in its discretion, and upon such terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment, order, or other proceeding taken against him, through his mistake, inadvertence, surprise, or excusable neglect.”
      It can scarcely be contended that when a trial has been had, the court under this section would grant relief, when it would not grant a motion for a new trial under such circumstances.
      The decision in this court of Levy a. Joyce (1 Bosw., 622), does not conflict with this view. Though an excusable omission, and under very special circumstances, a claimant upon a fund who had omitted to produce his proofs at all upon a trial involving the rights of many others, was admitted after judgment.
      So in the important and pertinent case of Bell a. Kelly (2 Harr. N. J. R., 270), there was a judgment by default, and some proceedings were taken to amerce the sheriff. There was then an application to open the judgment on an affidavit that the defendant had been an indorser on several notes of the firm of Tyson & Go., and supposed, when sued, that the action was on one of such notes ; that about the 17th day of May, 1839 (after judgment), he for the first time discovered that one of such firm had been in the habit of forging his name on several notes; that he believed the note in question was false and forged ; that he called on the plaintiff’s attorney as soon as his suspicion was aroused, who had refused to let him see the note. The judgment was opened on terms. See also case cited at page 274.
      Now, few points are better settled than this, that a motion for a new trial on the ground of newly-discovered evidence, will not be entertained where the applicant has had the means of procuring the evidence at the former trial, and could have known of its existence then with the use of similar diligence with that which has obtained it subsequently. (3 Grah. W. on New Tr., 1030,1035.)
      Any degree of complicity, however, of the other side, in any fraud, or deception, or misleading, will decide the question, and induce the court to grant the application.
      It is not a justifiable conclusion, upon the papers before me, that the plaintiff participated in, or knew of any such fraud. Nor should I be warranted in saying that the mere fact of the extra amount being $7000, raises a presumption of fraud in him. He is entitled, in law and practice, to the benefit of the considerations that he has never kept a copy of his bid, believes the contract corresponded with it, and that the average of all the bids for filling earth is thirty-eight cents, and the average of the total amounts for the whole is about $14,162.
      But the plaintiff, in vindicating his own integrity, presents a case for the relief of the defendants. He is to be assumed as having offered a bid at forty-two cents for earth, making his aggregate amount for the work $15,197 instead of $8197. There were, then, nine lower bidders. The contract was made by the Mayor, Aldermen, and Commonalty, through the street-commissioner, on a misstatement or mistake of the fact. The contract sanctioned, and intended to be made, was forty-two cents. The contract actually made was unfounded in fact, and in my opinion void. The plaintiff meant and proffered to take the contract for forty-two cents. The Corporation never acceded to this, but did agree to a contract, which the plaintiff never agreed to. This mutual and fundamental mistake of the very basis of the contract, is ample ground for relief, and of the power of the court to give relief, I entertain no doubt. (Levy a. Joyce, 1 Bosw., 622.)
      But the plaintiff has performed the work, and has got a judgment after litigation, that he is entitled to payment. There does not seem to be any justice or good reason for giving relief beyond correcting the error in this particular.
      My impressions are, as the Code permits the fixing of terms and conditions, that the plaintiff has a right to put himself in the place of the actual lowest bidder, Mr.-, whose proffer was for $10,650.
      The consequence of this would be a reduction upon the judgment of $2453, with interest from the 1st day of May, 1857.
      Still, I doubt whether I can do any thing regularly under this application, but to set aside the judgment and report of the referee. Whether the cause may be proceeded upon under the order of reference, or what other course may be regular, is for counsel to determine.
      Order to set aside and vacate the judgment entered in this cause, with the report of the referee, and all proceedings subsequent to such judgment, without costs'.
      On settling the order, the counsel may bring before me the above considerations, if so advised.
    
   Bosworth, Ch. J.

A judgment was entered in this action on the 13th of September, 1858, on the report of a referee, in favor of the defendant, made the 21st of May, 1858.

D. Golden Murray was appointed a receiver of the property and effects of this company on the 31st of May, 1858 ; on the 13th of September, 1858, he was served with written notice of the entry of such judgment, as was also his attorney as such receiver, and as was also the attorney in the action of the said company.

The receiver now moves, pursuant to a notice dated the 27th of July, 1859, for an order vacating said judgment, and the said report of the referee, and the order of reference, and for “ leave to proceed with such action, on the ground of irregularity in proceedings before the referee, and of fraud in obtaining such order of reference and entering said judgment, and on the other grounds set forth in the papers served, or for such other or such further relief as to the court shall seem meet.”

There is no irregularity in the proceedings before the referee, so far as the form of procedure is concerned, which can affect the judgment. That adjournments were not "formally made from day to day, or from the time of one hearing to that of another, is in itself of no consequence, if both parties gave all the testimony they desired, and submitted the cause on such testimony, to be decided by the referee. So far as regularity consists in conforming the proceedings to the settled practice, and in the observance of established rules and modes of procedure, there is no departure shown amounting to an irregularity that can affect the judgment.

There was no fraud in obtaining the order of reference in the sense that any artifice or deception was practised by the defendant to secure a referee, nor was the referee presumptively, or in fact, biased in his favor, nor was he deficient in capacity or general integrity. His position, in ail respects which could possibly exert any influence over him, was well known to all parties, and presumptively would be favorable to the company. His appointment was authorized by a resolution of the company, was satisfactory to the defendant, and was ordered by the court, on the written consent of the attorneys of record, of both parties.

There was no fraud in obtaining such order, unless it was procured with the fraudulent intent and preconceived design of going through the forms of a trial before the referee; and of so presenting the case as to secure by collusion with the referee, or without collusion on his part, a report in favor of the defendant, when, in justice, it ought to be in favor of the plaintiffs for a large amount. Ho facts are shown, which, if true, would furnish a motive for Mr. Vanderbilt, or any stockholder or officer of the company, to desire such a result. Some circumstances of suspicion are developed, as for instance in the testimony of Mr. Doyle; and these are founded not so much by any thing which he proves affirmatively, as by his refusal (on grounds sustained by a learned and eminent referee), to answer certain questions put to him. Mr. Green’s notes of the testimony of Mr. J. L.- White (read on this motion), of testimony given, not in this action, but in another, that Vanderbilt said: “ He was disposed to settle with Garrison, and was willing to settle with him,” that “ they had agreed upon terms of settlement,” * * “that he had agreed to dismiss the suit,” but if it was dismissed, he had been told, “ the company would be liable to Chrysler under their agreement with him,” and thereupon the witness advised, as a mode by which that difficulty could be overcome, “ a reference of the suit, and a judgment of the court on the referee’s report,” is not necessarily inconsistent with good faith in Mr. Vanderbilt, and conscientious advice by Mr. White, even if it be assumed that Mr. Green’s notes state the testimony given with substantial accuracy. What the terms agreed upon were, is not stated. They may have included an extinction of the claim of Garrison & Go. against the company amounting to some §60,000, and have been that much more favorable to the company than the report of the referee. It is consistent with all that Mr. White is alleged to have said, that he supposed a regular reference and a full and fair trial would result in establishing no claim in favor of the company more beneficial to it than the terms agreed upon; that for that reason he advised a reference, and not for the purpose of defrauding the stockholders and creditors of the company, by an abuse of judicial proceedings. This construction should be given to the declarations thus made and advice given, unless the evidence forbids it. There is no evidence before me, inconsistent with good faith and an honest purpose on the part of both of these gentlemen in respect to this question.

Mr. Garrison makes affidavit, that the statement in Mr. Green’s notes of the testimony of Mr. White, “ so far as the same relates to a dismissal of this action, or a settlement thereof, so far as deponent’s knowledge extends, and as deponent verily believes, is wholly untrue and without foundation.”' By this I understand him to mean, that it is wholly untrue that there was in fact any settlement agreed upon between him and Vanderbilt, or that the cause was referred with any collusive design.

The counsel who conducted the cause in behalf of the company before the referee, swears, that so far as he is concerned, “ he acted towards said company in good faith, and under the instructions of the Board of Directors of said company, without any fraud or collusion with said Garrison, or any other person.”

The referee swears, that he “ supposed and believed, and now believes that said reference was made for the bona fide purpose of a full and fair trial of the matters in controversy between the parties, and in the usual and customary course of references in cases of a like character,” and that he then believed, and now believes that “ he decided in strict conformity to the law and facts of the case * * * as presented to him on said reference.”

Mr. Vanderbilt’s answer to the complaint of Chrysler, in a suit brought by the latter against Vanderbilt and the said company was read. That answer denies the statements made in that complaint, as to an alleged settlement between him and Garrison; Vanderbilt, at the time of the alleged conversation between him and Mr. White, or at the time of the alleged settlement with Garrison, was not president of the Accessory Transit Company. The declarations of a third person as to what he said, however accurately reported, are not entitled to much consideration as evidence, on a question like the present, between the parties now before me. But Mr. Vanderbilt makes an affidavit on this motion, in which he swears, that he never settled this suit, or any of the matters therein with said Garrison, or with any one on his account; that deponent never said to, or in the hearing of J. L. White, nor any one else, that he had so settled this action, or any matters therein with said Garrison, or any thing to that effect; that deponent had no power to do so, and should not have deemed it proper to interfere therewith, after he ceased to be the president of said company aforesaid,” which was the 4th of May, 1857.

It appears that Chrysler was the instigator of this suit, and that it was brought upon an agreement between him and said company, that he should have a specified percentage of the net amount, which, by evidence of his procurement, should be collected from Garrison. His suit against Garrison and the company is brought to obtain an account of the amount received as a consideration for the alleged settlement of the suit, and not to recover damages on the ground of a fraudulent and collusive settlement, whereby he has been prevented from establishing that Garrison really owed the company the large sum which this suit was brought to recover.

To grant this motion, I must hold that the circumstances sworn to, and which are claimed to show, or.fairly tend to show a collusive settlement, should outweigh the direct denials of the parties to the alleged settlement, and the denials of the referee and of the counsel of the company, of there being any such collusive purpose and intent, so far as they knew or believe, either in obtaining the reference, or in conducting it.

To so hold, I must find upon the whole papers, at least a fair prima facie case of fraud on the part of Vanderbilt and Garrison, as against the company, and that the referee and the company’s counsel were privy to it, if not parties to it.

Such a proposition is too unreasonable, on the case as now" presented, to be entertained.

It must be borne in mind, that the judgment which the receiver seeks to set aside, on motion, was entered, after an actual trial, which was some months in progress, in which the cause, so far as the record speaks, was decided on its merits.

The receiver and his attorney were notified in writing of the judgment, on the day on which it was entered.

The counsel of the plaintiff swears, that after the receiver was appointed, he called on the attorney of the receiver, and “ informed him of the then state and condition of the action in general terms, and that the papers were before the referee,” and gave said counsel “ to understand that he deemed his connection with said suit, and his retainer as counsel for said company terminated.” This is not denied.

This case is different from those in which the court interferes by motion to open a judgment by default, or to set aside a judgment entered on bond and warrant of attorney, obtained by some trick or device by which one party has been misled by the other.

In an action brought to obtain the relief sought by this motion, upon such evidence as is now presented before me, the duty to dismiss the complaint would be clear. It would be singular, if it were to be set aside on motion, on less evidence than would suffice, on an actual trial of issues formed in an action brought to secure the same object.

The motion must be denied. There is no reason to doubt-the good faith of the receiver in making the motion, and it is therefore denied without costs.

There is no reason why a reference should be ordered to ascertain whether the judgment was collusive and fraudulent, or was entered upon a report conscientiously made upon a trial had to ascertain the actual merits.

Such a reference cannot be conducted at much less expense, if any, than an action can be tried, which may be brought to secure the same result.

The receiver, without any permission from the court, if so advised, probably, has the power to bring an action for such a purpose, and to recover any sum which Garrison justly owed, if it can he established that he owed any thing to the company. But that is a matter with which 'the court will not interfere on behalf of the receiver, on such a state of facts as the evidence of this motion presents.

Motion denied, without costs.