Case Name: William E. D. Stokes, Respondent, v. Edward S. Stokes, Appellant, Impleaded with Others
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1895-05
Citations: 94 N.Y. Sup. Ct. 152
Docket Number: 
Parties: William E. D. Stokes, Respondent, v. Edward S. Stokes, Appellant, Impleaded with Others.
Judges: O’Brien, J., concurred.
Reporter: Supreme Court Reports (Hun)
Volume: 94
Pages: 152–160

Head Matter:
William E. D. Stokes, Respondent, v. Edward S. Stokes, Appellant, Impleaded with Others.
Reference in an action for misconduct of corporate officers — not ordered prior to adjudication of misconduct — proceeding under an intermediate order — not a waiver of the right to appeal — time to appeal therefrom.
If the object of an action is to compel the officers of a corporation to account for official misconduct, and not to procure the examination of a long account, a reference cannot be ordered to take and state an account between the defendants and the corporation of which they are officers, until there is some proof to sustain the allegations that there has been some official misconduct and a deter-nation to that effect has been reached by the trial judge and is put into the form of an interlocutory judgment directing an accounting.
Under the Godo of Civil Procedure a party may proceed under an intermediate order and wait until the judgment is entered before appealing therefrom. The right to appeal from the intermediate order is not waived by proceeding under it, but continues until the entry of judgment in the action and the expiration of the time to appeal from the same. (Follett, J., dissenting.)
Where a party to an action has proceeded under an order of reference, and the order of reference is thereafter materially amended by the court, and in consequence of such amendment an appeal is then taken from the order of reference as amended, the party taking the appeal refusing to go on before the referee under the amended order of reference, it cannot be said that by proceeding under the original order of reference he waived his right to appeal from the order of reference as amended. (Follett, J., dissenting.)
Appeal by the defendant Edward S. Stokes from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 20th day of June, 1894, referring the action to a referee to take and state an account between the defendant Edward S. Stokes and a corporation of which he was an officer, and also from such order, as amended by an order made at the New York Special Term, and entered in said clerk’s office on the 30th day of November, 1894, and also from said order entered on the 30th day of November, 1894, amending said order entered on the 20th day of June, 1894.
John J. Adams, for the appellant.
Frank H. Platt, for the respondent.

Opinion:
Van Brunt, P. J.:
This action is brought under section 1781 of the Code of Civil Procedure to compel the defendants to " account for their official conduct in the management and disposition of the funds and property of the corporation, ' the Hoffman House,' committed to their charge as directors, officers and trustees, and return the account books and papers and checks of the defendant corporation." The complaint charges that " the defendants have had since its organization and now hold the control of said corporation, and have been guilty of official misconduct therein and in the management and disposition of its funds and property committed to their charge, and that the said defendant Stokes lias wrongfully acquired to himself and transferred to others money and property of the corporation, and has lost or wasted the same, with the knowledge and concurrence or acquiescence" of certain of the other defendants named. Upon the trial, after a certain amount of evidence was taken, the learned trial judge, without having reached any conclusion upon the question of whether the defendant Stokes or the other defendants had been guilty of fraud, neglect, violation of law or other misconduct as charged, made an order appointing a referee to take and state an account of certain transactions had by the defendant Stokes with tlie defendant corporation, the Hoffman House, which appear upon the books of the corporation in three accounts, the referee being directed, among other things, "to state and report any special circumstances, as well as his reasons for allowing or disallowing any claim or allowances that may be claimed by either party." The parties proceeded before the referee, and after certain' testimony was taken, an application was made for an amendment of the order of reference, directing an accounting by the defendant Stokes of all the dealings and transactions between himself and the Hoffman House, and directing him to produce the books and papers of the corporation and deliver them to the referee. Thereupon this appeal was taken from both orders.
We can find no authority for the orders made. The object of this action was go compel the defendant officers to account for official misconduct, and not for the examination of a long account, and the latter could not be ordered until there was some proof to sustain the allegations that there had been some official misconduct and a determination to that effect is reached by the trial judge and put in the form of an interlocutory judgment directing the account. The issue here presented was as to whether the defendants, or one of them, Stokes, had been guilty of official misconduct. "Without, however, reaching any determination upon this question, the trial judge, as already stated, appointed a referee. For such practice we can find no authority either under section 1013 or section 1015 of the Code of Civil Procedure, which are the sections showing in what actions and under what circumstances references may be ordered. (See cases cited in Judge Follett's opinion.)
The claim is made that there has been a waiver of the right to appeal by reason of the fact that the appellant went on before the referee, and several authorities are cited to sustain this proposition. An examination of these cases will show that they arose under the old Code, and have no application to the condition of the law as it now exists. Section 1316 of the present Code of Civil Procedure is as follows : " An appeal taken from a final judgment brings up for review an interlocutory judgment or an intermediate order which is specified in the notice of appeal, and necessarily affects the final judgment, and which has not already been reviewed, upon a separate appeal therefrom, by the court or the term of the court, to which the appeal from the final judgment is taken. The right, to review an interlocutory judgment, or an intermediate order, as prescribed in this section, is not affected by the expiration of the time within which a separate appeal therefrom might have been taken."
Under the old Code there was no authority to review an intermediate order upon the appeal from a judgment. Such practice was introduced by the new Code, with certainly no good results, but it still exists and must be considered. A party may now go on under an intermediate order and wait until the judgment is entered in order to review the same. There can be, therefore, no waiver of a right to appeal from such intei'mediate order by going on under it. In the case at bar the party did not waive his right to appeal by going on, because that exists until the entry of judgment, and the expiration of his right to appeal from the judgment.
Furthermore, the right to appeal from the last order entered was not waived, if it could be waived by going on before the referee, because the original order was materially amended, and then an appeal was taken from the order as amended in consequence of such amendment. The party refused to go on before the referee under the amended order of reference, and it is difficult to see how, because he proceeded under the original order of reference, and was content and willing so to do, when the court amended the order, such procedure waived his right to appeal from the order as so amended.
It seems to me that, it being conceded that the court had no power to make the orders of reference in question as against the consent of the defendants, the right to review such orders has not been impaired by any of the proceedings of the defendant.
The orders should be reversed, with costs.
O'Brien, J., concurred.