#### MARY C. COLEMAN v. E. T. McCULLOUGH.

(Filed 2 December, 1925.)

1. Reference! — Remanding' Cause — Hearings.

' Where tbe trial judge in passing upon tbe report of tbe referee to bear evidence, finds tbe facts therefrom, and reports them with bis conclusions of law, sustains it only in part, and refers tbe case to tbe same referee “to find facts and state conclusions of law upon tbe issues,” etc., tbe order of remand was for tbe purpose and comprehended only a revision of bis findings and conclusions upon tbe evidence already taken before him.

2. Same — Evidence—Notice to Parties.

Where a case has been remanded to tbe referee for bis findings and conclusions upon tbe evidence already taken before him without objection, and a party bad made no request for a further bearing or tbe introduction of further evidence, upon a restatement by tbe referee of bis report, it is not requisite that tbe referee give him notice.

3. Same — Cumulative Evidence — Discretion of Court.

Tbe further report of a referee after tbe case bas been remanded and approved by tbe trial judge, will not be disturbed on appeal to tbe Supreme Court for tbe mere failure to receive cumulative evidence, as this is addressed to tbe sound discretion of the trial judge.

4. Same — Procedure—Filing Report — Laches.

Where tbe cause is referred to a referee, a party thereto is affected with notice of tbe various steps taken during the progress of tbe trial, including tbe filing of tbe report of tbe referee, and bis failure on this account to file his exceptions in apt time will not excuse his laches in so doing.

5. Same — Findings—Exclusion of Evidence.

A case will not be remanded to a referee upon tbe ground that evidence should have been taken on tbe question as to the measure of damages in tbe movant’s favor for breach of contract, when tbe referee bas found, upon sufficient evidence, that tbe opposing party had not breached it, and this finding bad been approved by tbe trial judge.

6. Reference — Orders.

It is suggested that tbe trial judge in remanding a case to a referee, point out the special purpose of tbe recommittal, in order to avoid confusion or controversy therein.

Stacy, G. J., dissenting.

Appeal by plaintiff from *Schmck,*Jat March Term, 1925, of Forsyth.

On 20 May, 1922, tbe plaintiff and tbe defendant entered into a written agreement by tbe terms of wbicb tbe defendant was to build for tbe plaintiff at a stipulated price certain bouses on 'lots owned by tbe plaintiff. In tbe complaint it was alleged tbat tbe defendant bad failed to comply witb bis contract, bad locked tbe bouses, and bad refused to do *591any other work or to permit the plaintiff to take possession of the property, whereby she had suffered loss. The defendant denied the material allegations of the complaint and alleged that he had performed his contract and that the plaintiff had paid only $400 on the contract price of $2952.50, leaving due him $2552.50; also that he had sustained other loss by reason of the plaintiff’s breach of contract.

The following facts appear in the record: (1) At the February Term, 1924, of the Superior'Court, Judge Bryson referred the cause to H. M. Bateliffe, as referee, instructing him “to hear the evidence and arguments in the case, find his statement of facts and conclusions of law, and to report to the Superior Court.” (2) In the months of February and March, 1924, the referee by consent of counsel heard the testimony of some twenty-five witnesses, and (argument having been waived by counsel) thereafter prepared his report, which was filed 11 August, 1924. (3) On 26 August, 1924, the plaintiff filed exceptions, and at the November Term, 1924, Judge McElroy affirmed the first four findings of fact and set aside findings 5 to 10 inclusive and the first and second conclusions of law, and thereupon remanded the cause to the referee “to find facts and state conclusions of law upon the issues that arise upon the pleadings and report his findings of fact and conclusion of law.” (4) The plaintiff excepted to the court’s approval of the third and fourth findings of fact, but mot to the order remanding the cause. (5) The referee’s second report which was dated 5 December, 1924, and filed 8 December, again recited the waiver of argument. In formulating this report the referee did not give notice to either party of a further hearing; and neither party made a request to be heard or to introduce additional evidence. (6) The plaintiff did not have actual notice of the filing of this report until 23 January, 1925; and between 8 December, 1924, and 23 January, 1925, two terms of the Superior Court were held. (7) On 7 February, 1925, a motion to remand the canse to the referee was filed, and at the March Term, 1925, it was heard by Judge Schenck and denied. The plaintiff then asked leave or moved to file exceptions to the report and his request or motion was refused. Judgment was rendered in favor of the defendant for $2390.75, the amount sued for $2552.50, less deductions for minor repairs made by the plaintiff. The plaintiff excepted and appealed.

*Bwink, Clement & Hutchins for plaintiff.*

*Raymond C. Parker and W. L. Morris for defendant.*

AuaMs, J.

The plaintiff rests her appeal upon two contentions: (1) That under Judge McElroy’s order remanding the cause she had a legal right to be heard and to introduce evidence before the referee, and that *592baying been denied tbis privilege sbe bad a legal right either to a reference or to a reasonable time for filing exceptions. (2) That sbe was entitled to a rereference or to an opportunity for filing exceptions on the ground of excusable neglect or surprise under C. S., 600. It appears, then, that the plaintiffs exceptions depend primarily, if not exclusively, upon the purpose and effect of Judge McElroy’s order; and such purpose and effect can be determined only by reference to the context and the attendant facts.

It is to be observed in the first place that Judge Bryson appointed a referee to take the evidence, bear the argument, find the facts, and state bis conclusions of law. Tbis order, to which there was no exception, referred the cause for trial and not for the mere statement of an account as a step preparatory to a trial in term. *Barrett v. Henry,*85 N. C., 322; C. S., 572 *et seq.*The evidence was taken, the argument was waived, and the report was filed in the Superior Court. The principal issue was whether the defendant bad built the bouses in compliance with bis contract. In the fifth paragraph of bis findings of fact the referee pointed out bis personal examination of the bouses, made at the suggestion of counsel on both sides, and deduced bis finding not only from the evidence, but from bis personal observation; and in the sixth paragraph be suggested that by taking the testimony of designated witnesses the court would no doubt concur in bis finding. It would seem, then, that Judge McElroy’s instruction that the referee should find the facts and state the law upon the issues raised by the pleading, is reasonably susceptible of only one construction, namely, that the referee, disregarding bis personal observation of the bouses and relying upon the entire evidence, not particularly upon the testimony of certain witnesses, should pass upon the specific issues and find whether either party bad failed to abide by the terms of the written agreement. Manifestly the taking of additional evidence was not within the purview of the order; only a revision of the findings upon the evidence already taken. The object was a more definite report, not another trial before the referee. The argument of counsel bad been waived and the plaintiff made no request of the referee to be beard before the second report was filed. Upon the mere restatement of bis report the referee was not required to give notice to the parties. *Gay v. Grant,*116 N. C., 93; *Winstead v. Hearne,*173 N. C., 606.

There is another point: the plaintiff in effect admits in her brief that the proposed evidence, if admitted, would have been cumulative; and under the circumstances disclosed by the record we are satisfied the report should not be set aside for the introduction of evidence of tbis character. We find nothing in the record which prevented the operation *593of tbe general rule and tbe consequent exercise by tbe judge of bis sound discretion in refusing to recommit tbe cause for tbe admission of cumulative evidence.

Nor was tbe referee required to notify tbe parties tbat tbe report bad been filed; tbeir cause was pending and as tbey bad no right to reopen tbe case for tbe introduction of cumulative evidence and as tbe argument bad been waived, in contemplation of law tbey were affected with notice of tbe various steps tbat were taken during tbe progress of tbe trial, including of course tbe filing of tbe report. *Blue v. Blue,*79 N. C., 69; *University v. Lassiter,*83 N. C., 38; *Dempsey v. Rhodes,*93 N. C., 120; *Williams v. Whiting,*94 N. C., 481; *Coor v. Smith,*107 N. C., 430; *Reynolds v. Machine Co.,*153 N. C., 342; *Barger v. Alley,*167 N. C., 362.

In *S. v. Peebles,*67 N. C., 97, tbe Court said: “It is tbe well-settled rule tbat exceptions to sucb reports, must be made, as a matter of right, at tbe court to which tbe report is made, and after tbat it is a matter of discretion with tbe court whether sucb exceptions shall be allowed or not.” *Green v. Castlebury,*70 N. C., 20; *University v. Lassiter, supra; Commissioners v. Magnin,*85 N. C., 115; *Long v. Logan,*86 N. C., 535; *Mfg. Co. v. Williamson,*100 N. C., 83; *McNeill v. Hodges,*105 N. C., 52. Tbe plaintiff took no action with reference to tbe report until two terms of tbe Superior Court bad elapsed and thereby lost her opportunity to file exceptions as a matter of right.

Tbe plaintiff’s motion to remand tbe cause was not meritorious. It was based upon tbe affidavit of Jobn Coleman, tbe plaintiff’s husband, in which it was alleged tbat tbe plaintiff bad been denied tbe right to introduce evidence tending to show tbe difference in value between tbe bouses as built and as contemplated by tbe contract. Tbe answer to this position is obvious. Apart from the question of its cumulative character tbe proposed evidence'would have been competent only in case of tbe defendant’s failure to comply with bis contract. But tbe referee found as a fact tbat there bad been a substantial compliance with tbe defendant’s contract, and this finding was affirmed by tbe judge.' There was no occasion for applying tbe measure of damages set up in tbe affidavit.

As to tbe second contention only this need be said: if, without deciding tbe point, we assume tbat section 600 may be invoked in this kind of proceeding, still, as tbe plaintiff was charged with notice of each step in tbe progress of tbe cause, her failure to file exceptions to tbe report was not tbe result of surprise or excusable neglect within tbe meaning of tbe statute.

It may not be inappropriate to suggest tbat when a cause is remanded to a referee, controversy may be prevented by an order pointing out tbe *594special purpose of tbe recommittal- — whether to take additional evidence, or to make additional findings of fact on the evidence taken, or simply to revise the report. "When this is done neither the referee nor the parties need have cause for a difference of opinion as to the scope of the further proceeding. The judgment is

Affirmed.

Stacy, O. J.,

dissenting: I regret to disagree with my brethren on a question of procedure, but our difference in the present case is fundamental and goes to the basic right of every litigant to be heard. *Markham v. Carver,*188 N. C., 615.

It will be observed that Judge McElroy adopted the first four findings of fact, as originally made by the referee, set aside the last six, together with the referee’s first two conclusions of law, and then remanded the cause to the referee “to find facts and state conclusions of law upon the issues that arise upon the pleadings and report his findings of fact and conclusions of law to the Superior Court.”

It is held by the court that this order did not contemplate the hearing of additional evidence by the referee, but that its only purpose was to have the referee revise his findings upon the evidence already taken and make his report more definite. I do not so understand the order. If this be its meaning, why was the matter sent back to the referee at all ? The evidence previously taken by the referee accompanied his report and was then before the judge of the Superior Court who-was authorized, in the exercise of his supervisory power, to amend, modify, set aside, make additional findings and confirm, in whole or in part, or disaffirm the report of the referee. C. S., 579; *Vaughan v. Lewellyn,*94 N. C., 474; *S. v. Jackson,*183 N. C., 695. The judge adopted some of the findings originally made by the referee and set aside others. His order certainly contemplated another hearing before the Superior Court upon the final report of the referee, and this would have been a useless consumption of time if it was to be made only on the evidence already taken and then before the court. Why have another hearing upon the same evidence when both the referee and the judge had already heard the case on that evidence? Why did Judge McElroy not proceed to judgment immediately upon the evidence then before the court ?

The two reports of the referee are almost identical. The amount awarded the defendant is the same in both reports. On exceptions filed to the first report, six of the referee’s findings were set aside. These, it seems to me, have been reinstated and confirmed without adequate opportunity on the part of the plaintiff to- be heard, either before the referee or the judge of the Superior Court. The fact that they were set aside in the first instance would indicate serious dispute as to their *595correctness, but it appears tbat plaintiff won on ber exceptions first filed, only to lose later without further opportunity to be heard.

Possibly the plaintiff deserves to lose on the merits of her case; but as a matter of procedure, she is entitled to a fair opportunity to be heard and she ought to be made to feel, as every litigant should rightly feel, that she has had a fair chance to present her case. A majority of the Court considers that this has been done in the instant suit. I think otherwise; and from this difference, springs our divergence of opinion.