Source: https://supreme.justia.com/cases/federal/us/253/300/
Timestamp: 2019-04-18 10:47:01+00:00

Document:
The question whether an order of the district court appointing an auditor in a law case will operate to deprive a party of the right of trial by jury may be determined by this Court on application for a mandamus and prohibition. P. 253 U. S. 305.
In an action at law for goods sold and delivered, involving a counterclaim and many items of cross-account between the parties, it is within the power of the district court, when necessary to a proper consideration of the case by court and jury, to appoint, without consent of parties, an auditor to examine books and papers, make computations, and hear testimony, and whose report shall separate the disputed from the undisputed items, express an opinion on those in dispute, and, while leaving the parties as free to call, examine, and cross-examine witnesses as if it had not been made, shall function as prima facie evidence of the facts found and conclusions reached, unless rejected by the court. P. 253 U. S. 306.
While, prior to the adoption of the Constitution, auditors, so empowered, were not appointed either in England or in any of the Colonies in connection with trial by jury, their employment does not violate the Seventh Amendment, since it works no obstruction of the right of trial by jury, and the Amendment does not require that old forms of practice and procedure be retained. P. 253 U. S. 307.
An order of court, like a statute, is not unconstitutional because it endows an official act or finding with a presumption of regularity or of verity. P. 253 U. S. 311.
The auditor is an officer of the court which appoints him; the proceedings before him are subject to its supervision, and the report may be used only if, and so far as, acceptable to the court. P. 253 U. S. 312.
a compulsory reference to simplify and clarify the issues and make tentative findings is possessed by the district court inherently at law as in equity. P. 253 U. S. 312.
In the absence of any state or federal statute or rule of court excluding them, the fee of an auditor in a case at law and the expense of his stenographer are taxable as costs. P. 253 U. S. 314.
But such costs cannot be taxed in whole or in part against the prevailing party, the rule of the federal courts at law being that that party is entitled to the entire costs in the trial court, and that the court is without power to apportion them. P. 253 U. S. 317.
Error in apportioning costs held not to require remedy by mandamus or prohibition, a suitable remedy being available by application to the district court or, after final judgment, by writ of error from the court of appeals. P. 253 U. S. 319.
Peterson had brought an action at law in that court against Arthur Sidney Davison to recover a balance of $21,014.43, alleged to be due for coal sold and delivered as shown by a long schedule annexed. The answer substantially admitted the items set forth in the schedule filed by plaintiff, but denied that it presented a full account of the transactions between the parties, and alleged that there were other deliveries of coal and other payments which the defendant had made, and also that he was entitled to additional allowances. It further alleged, by way of counterclaim, that the plaintiff was indebted to him for failure to perform its contracts for coal in the sum of $9,999.10. In response to a demand for a bill of particulars, defendant filed schedules containing more than 200 items which he proposed to establish by way of defense.
"to make a preliminary investigation as to the facts, hear the witnesses, examine the accounts of the parties, and make and file a report in the office of the clerk of this court with a view to simplifying the issues for the jury, but not to finally determine any of the issues in the action, the final determination of all issues of fact to be made by the jury on the trial, and the auditor to have power to compel the attendance of, and administer the oaths to, witnesses, the expense of the auditor, including the expense of the stenographer, to be paid by either or both parties to this action in accordance with the determination of the trial judge."
"6. The various penalties, commissions, cash discounts, and other deductions which defendant claims to be entitled to deduct from the invoice price of the various shipments, the items thereof which are admitted by plaintiff as proper deductions, and the items in dispute, with his opinion as to each of such disputed items."
"7. His opinion as to the net amount due on each invoice of coal sold and delivered to defendant."
Thereupon application was made here for leave to file this petition. It prays that Judge Hand and the auditor named be prohibited from proceeding under the order appointing him, and it prays also that Judge Hand, or such other judge who may at the time hold the trial term of that court, be commanded to restore the case to the trial calendar, and that the same be tried in the regular and usual way. Leave to file the petition was granted January 12, 1920, and an order to show cause issued. The petitioner insists that the district court is without power to make the order appointing the auditor, and that proceedings thereunder would violate the Seventh Amendment to the federal Constitution.
and the courts to the inconvenience that would be raised by" a proceeding "that ultimately must be held to have been required under a mistake." The objection to our jurisdiction is unfounded. We proceed, therefore, to the consideration of the merits of the petition.
Second. The question presented is one of power in the district court. If, under any circumstances, it could appoint an auditor with the duties here prescribed without the consent of the parties, the facts clearly warranted such action in this instance. The plaintiff sued for a balance alleged to be due on an account annexed containing 298 items. The defendant set up another account containing 402 items. Included in the latter, besides certain charges against defendant for additional deliveries, were over 30 cash items of credit not allowed for in the plaintiff's account. These 402 items were alleged to arise out of 123 different deliveries of cargoes (or partial cargoes) of coal made on 91 different days during a period of eleven months. The coal delivered was of various kinds, and the invoice prices for the same kind differed from time to time. In respect to most of these deliveries, there were claims for allowances by way of penalties, commissions, and cash discounts, and as to some there were claims for allowances on account of freight.
other papers and to make computations, but to hear and pass upon conflicting testimony of the parties and of other witnesses. This full hearing, while obviously necessary to enable the auditor to form a trustworthy judgment on the disputed items, would serve also to narrow the field of controversy. For such a tentative trial acts as a sifting process by which misunderstandings and misconceptions as to facts are frequently removed. In the course of it, many contentions or assumptions made by one party or the other are abandoned. Agreement is thus reached as to some of the facts out of which liability is alleged to arise, even when the items to which they relate remain in dispute. See Fair v. Manhattan Ins. Co., 112 Mass. 329.
The order expressly declared that the auditor should not "finally determine any of the issues in this action, the final determination of all issues of fact to be made by the jury at the trial," but it did no provide affirmatively what use should be made of the report at the trial. It may be assumed that, if accepted by the court, the report would be admitted at the trial before the jury as prima facie evidence both of the evidentiary facts and of the conclusions of fact therein set forth. The report, being evidence sufficient to satisfy the burden of proof (Wyman v. Whicher, 179 Mass. 276), would tend to dispense with the introduction at the trial before the jury of evidence on any matter not actually in dispute. The appointment of the auditor would thus serve to shorten the jury trial by reducing both the number of facts to be established by evidence and the number of questions in controversy. A more intelligent consideration of the issues submitted to the jury for final determination would result.
The office of auditor, with functions and powers like those here in question, was apparently invented in Massachusetts. It was introduced there by c. 142 of the Acts of the Legislature of the year 1818, and, as a part of the judicial machinery, it has received the fullest development in that state. No act of Congress has specifically authorized the adoption of the practice in the federal courts. We have therefore to decide not only whether such appointment of auditors is consistent with the constitutional right of trial by jury, but also whether it is a power inherent in the district court as a trial court.
may be used to adapt the ancient institution to present needs and to make of it an efficient instrument in the administration of justice. [Footnote 5] Indeed, such changes are essential to the preservation of the right. The limitation imposed by the amendment is merely that enjoyment of the right of trial by jury be not obstructed, and that the ultimate determination of issues of fact by the jury be not interfered with.
Insofar as the task of the auditor is to define and simplify the issues, his function is, in essence, the same as that of pleading. The object of each is to concentrate the controversy upon the questions which should control the result. United States v. Gilmore, 7 Wall. 491, 74 U. S. 494; Tucker v. United States, 151 U. S. 164, 151 U. S. 168. No one is entitled in a civil case to trial by jury unless and except so far as there are issues of fact to be determined. It does not infringe the constitutional right to a trial by jury to require, with a view to formulating the issues, an oath by each party to the facts relied upon. Fidelity & Deposit Co. v. United States, 187 U. S. 315. Nor does the requirement of a preliminary hearing infringe the constitutional right, either because it involves delay in reaching the jury trial or because it affords opportunity for exploring in advance the evidence which the adversary purposes to introduce before the jury. Capital Traction Co. v. Hof, 174 U. S. 1. In view of these decisions, it cannot be deemed an undue obstruction of the right to a jury trial to require a preliminary hearing before an auditor.
Commission. The auditor is an officer of the court which appoints him. The proceedings before him are subject to its supervision, and the report may be used only if, and so far as, acceptable to the court.
That neither the hearing before the auditor nor the introduction of his report in evidence abridges in any way the right of trial by jury was the conclusion reached in 1902 in the District of Massachusetts in Primrose v. Fenno, 113 F. 375 and 119 F. 801, the first reported case in which an auditor was appointed with the powers here conferred. The practice there established has been followed in the Southern District of New York, Vermeule v. Reilly, 196 F. 226, and in the Eastern District of Tennessee, United States v. Wells, 203 F. 146.
Fifth. There being no constitutional obstacle to the appointment of an auditor in aid of jury trials, it remains to consider whether Congress has conferred upon district courts power to make the order. There is here, unlike Ex parte Fisk, 113 U. S. 713, no legislation of Congress which directly or by implication forbids the court to provide for such preliminary hearing and report. But, on the other hand, there is no statute which expressly authorizes it. The question presented is therefore whether the court possesses the inherent power to supply itself with this instrument for the administration of justice when deemed by it essential.
"It is a reference to 'auditors,' a term which designates agents or officers of the court, who examine and digest accounts for the decisions of the court. They do not decree, but prepare material on which a decree may be made."
"Its office is to present the case to the court in such a manner that intelligent action may be there had, and it is this action by the court, not the report, that finally determines the rights of the parties."
of directing their attention to the matters actually in issue. United States v. Reading Railroad, 123 U. S. 113, 123 U. S. 114. The hearing and report were also essential, as shown above, to enable the jury to perform their specific duty. Owing to the difference in the character of the proceedings and of the questions ordinarily involved, the occasion for seeking such aid as is afforded to a judge by special masters, auditors, or examiners arises less frequently at law than in equity. A compulsory reference with power to determine issues is impossible in the federal courts because of the Seventh Amendment, United States v. Rathbone, 2 Paine 578, Fed.Cas. No. 16,121, but no reason exists why a compulsory reference to an auditor to simplify and clarify the issues and to make tentative findings may not be made at law, when occasion arises, as freely as compulsory references to special masters are made in equity. Reference of complicated questions of fact to a person specially appointed to hear the evidence and make findings thereon has long been recognized as an appropriate proceeding in an action at law. Heckers v. Fowler, 2 Wall. 123. The inherent power of a federal court to invoke such aid is the same whether the court sits in equity or at law. We conclude, therefore, that the order, insofar as it appointed the auditor and prescribed his duties, was within the power of the court.
"the expense of the auditor, including the expense of a stenographer, to be paid by either or both parties to this action, in accordance with the determination of the trial judge"
no provision for paying from public funds either the fees of auditors or the expense of the stenographer, the power to make the appointment without consent of the parties is practically dependent upon the power to tax the expense as costs. May the compensation of auditor and stenographer be taxed as costs, and if so, may the expense be imposed in the discretion of the trial court upon either party?
several of the circuits taxable as costs against the defeated party, Hake v. Brown, 44 F. 734. Compare Kelly v. Springfield Ry. Co., 83 F. 183; Tesla Electric Co. v. Scott, 101 F. 524. As early as 1843, Mr. Justice Story, sitting at circuit in Whipple v. Cumberland Cotton Manufacturing Co., 3 Story, 84, Fed.Cas. No. 17,515, approved, in an action at law for damages, although not specially authorized by any rule, the order of a survey, as "necessary for the true understanding of the cause on both sides," and ordered the expense paid by them. In cases in which courts have refused to tax as costs copies of stenographer's minutes and other expenditures incident to the litigation, attention has been called to the fact that they were made for the benefit of the party, as distinguished from expenditures incurred under order of the court, to make possible or to facilitate its consideration of the case. Stallo v. Wagner, 245 F. 636; New Hampshire Land Co. v. Tilton, 29 F. 764. But see Bridges v. Sheldon, 7 F. 17, 42.
"to conform to the state laws as to costs, when no express provision has been made and is in force by any act of Congress in relation to any particular item, or when no general rule of court exists on this subject."
services of referees, auditors, masters, and assessors, and many other matters not embraced in the fee bills since passed by Congress. [Footnote 8]"
Neither the Act of February 26, 1853, c. 80, 10 Stat. 161, Rev.Stats. § 983, nor any later act of Congress or rule of court deals expressly or by implication with the subject of taxing as costs the expense of an auditor. The practice, if any, governing in this respect the courts of New York would therefore be followed in the federal courts. See Huntress v. Town of Epsom, 15 F. 732. But, so far as appears, the preliminary hearing before an auditor in aid of jury trials is not a part of the judicial machinery of that state. The nearest analogy to it is the reference had in actions at law on long accounts as a substitute for a jury trial. The expense of the compulsory reference in such actions is so taxable. Code Civ.Proc. § 3256. As there is no statute, federal or state, and no rule of court excluding auditors' fees and the expense of his stenographer from the items taxable as costs, no reason appears why they may not be included like other expenditures ordered by the court with a view to securing an intelligent consideration of a case.
Seventh. The further question is whether the district court had power to make the expense of the auditor taxable in whole or in part against the prevailing party if the trial judge should so determine. The advantages of such a flexible rule are obvious. But general principles governing the taxation of costs in actions at law followed by the federal courts since their organization, preclude its adoption.
St. Anthony, 173 F. 496, and 184 F. 252, where the auditor was appointed by consent of the parties, the same court taxed both the auditor's and the stenographer's fees against the losing party, holding that it had discretion, if it was not obliged to do so, and a petition for writ of certiorari was denied by this Court. 220 U.S. 613.
See Prof. Langdell, 2 Harvard Law Review 241, 251-255; Holmes v. Hunt, 122 Mass. 505, 512.
See United States v. Rose, 2 Cranch C.C. 567, Fed.Cas. No. 16, 193; Barry v. Barry, 3 Cranch C.C. 120, Fed.Cas. No. 1,060; Bank of United States v. Johnson, 3 Cranch C.C. 228, Fed.Cas. No. 919. The report was not admitted before the jury as prima facie evidence of the truth of the statements or conclusions of the auditor. McCullough v. Groff, 2 Mackey 361, 366.
Sulzer v. Watson, 39 F. 414; Connecticut General Statutes, § 5752, (ed. of 1918); Act of Vermont, October 21, 1782, Slade's Vermont State Papers 456; Hall v. Armstrong, 65 Vt. 421; Missouri, Wagner's Stat. 1041, § 18; Edwardson v. Garnhart, 56 Mo. 81.
Steck v. C. F. & I. Co., 142 N.Y. 236. This fact has no bearing on the constitutional question involved here. The right to a jury trial guaranteed in the federal courts is that known to the law of England, not the jury trial as modified by local usage or statute. United States v. Wonson, 1 Gall. 5, 20, Fed.Cas. No. 16,750; Capital Traction Co. v. Hof, 174 U. S. 1, 174 U. S. 8. See also United States v. Rathbone, 2 Paine, 578, Fed.Cas. No. 16, 121; Howe Machine Co. v. Edwards, 15 Blatchf. 402, Fed.Cas. No. 6,74; Sulzer v. Watson, 39 F. 414; United States v. Wells, 203 F. 146, 149.
In Davis v. St. Louis & S. F. Ry. Co., 25 F. 786, a case involving a long account, a referee was appointed to report, apparently to determine the facts in accordance with the practice prevailing in Kansas, where the court was sitting.
See "Trial by Jury and the Reform of Civil Procedure," by Prof. A. W. Scott, 31 Harvard Law Review, 669.
Acts making findings in the tentative hearing before an auditor prima facie evidence were held not to infringe the right of trial by jury in Maine, Howard v. Kimball, 65 Me. 308, 327, and in New Hampshire, Doyle v. Doyle, 56 N.H. 567; Perkins v. Scott, 57 N.H. 55. A different conclusion was reached in Francis v. Baker, 11 R.I. 103, and Plimpton v. Town of Somerset, 33 Vt. 283.
In Massachusetts, the expense of the auditor was, prior to 1878, taxed in all cases as costs to be paid by the defeated party. See Acts of 1818, c. 142; Rev.Stats. (1836) c. 96, § 31; Gen.Stat. (1860) c. 121, § 50; Act of March 16, 1867, c. 67; Act of June 6, 1873, c. 342. By Act of April 23, 1878, c. 173, the expense of the auditor in cases tried in the superior or in the Supreme Judicial Court was made payable by the county. See also Rev.Laws (1902) c. 165, § 60; Act of June 5, 1911, c. 237; Acts of 1914, c. 576.
In Maine, the fees of the auditor were, prior to 1897, taxed as costs in favor of the prevailing party.Laws (1821) c. 59, § 25; Acts of 1826, c. 347, § 1; Rev.Stats. (1883) c. 82, § 70. Since the Act of March 12, 1897, c. 224, the fees and necessary expenses of the auditors are paid by the county.
In New Hampshire, the fees of the auditor are also taxable as costs in favor of the prevailing party, but the court may now, in its discretion, order them paid by the county. Act of June 23, 1823, c.19, § 1; Act of July 20, 1876, c. 35, § 4; Pub.Stat. (1901) c. 227, § 7.
Shreve v. Cheesman, 69 F. 785, 789. See also Scatcherd v. Love, 166 F. 53; Michigan Aluminum Foundry Co. v. Aluminum Co. of America, 190 F. 903, 904.
For instance, Rev.Stats. § 968, denying costs to a plaintiff or petitioner who recovers less than $500.
Crabtree v. Neff, 1 Bond, 554, Fed.Cas. No. 3,315; Hooe v. Alexandria, 1 Cranch C.C. 98, Fed.Cas. No. 6,667; Bartels v. Redfield, 47 F. 708; Trinidad Asphalt Paving Co. v. Robinson, 52 F. 347; United States v. Minneapolis, etc., Ry. Co., 235 F. 951, 953; West End St. Ry. Co. v. Malley, 246 F. 625, 627; Sears, Roebuck & Co. v. Pearce, 253 F. 960, 962; Wheeler v. Taft, 261 F. 978.
The general rule that, in actions at law, the prevailing party is entitled as of right to the taxable costs prevails in New York, and there is a further provision that, when plaintiff demands a judgment for a sum of money only, the plaintiff, if prevailing, is entitled to the costs whether the suit be one at law or in equity. Murtha v. Curley, 92 N.Y. 359; Norton v. Fancher, 92 Hun, 463.

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