Case Name: Mitchell et al. v. Oliver
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-03-28
Citations: 9 N.Y.S. 367
Docket Number: 
Parties: Mitchell et al. v. Oliver.
Judges: 
Reporter: West's New York Supplement
Volume: 9
Pages: 367–368

Head Matter:
Mitchell et al. v. Oliver.
(Supreme Court, General Term, First Department.
March 28, 1890.)
■Compulsory Reference—Practice.
Under Code Civil Proc. if. Y. § 1013, authorizing a compulsory reference where the trial will require the examination of a long account, a reference will not be ordered because the answer sets up a counter-claim consisting of numerous items, when the items result collaterally from an agreement between the parties to loan, advance, and sell on the one hand, and on the other to manufacture and consign for sale, and depend expressly upon the charge that defendant had suffered damages from the alleged misconduct of plaintiff.
Appeal from special term.
Action by Cornelius B. Mitchell, John J. Morris, and John J. Morris, Jr., ■against Alfred Oliver. Defendant appeals from an order of reference.
Argued before Van Brunt, P. J., and Brady and Daniels, JJ.
Francis Forbes, for appellant. Mitchell & Mitchell, for respondents.

Opinion:
Brady, J.
This action was brought to recover a balance of $1,798.60, and interest, due for moneys advanced and loaned by the plaintiffs, as commission merchants in the city of Hew York. The complaint alleged the loan and advance of money to the defendant as per schedule A, annexed to the complaint. Schedule A contains one item: "June 30th. Balance cash loaned prior to date, $7,361.57." Then follows a credit of four items, being balances of account of sales made on different dates, $5,562.99; this leaving the amount due, as alleged in the complaint, according to Schedule A, $1,798.60. The defendant denies that there is any money due, and then alleges by way of counter-claim that in May, 1886, he entered into a contract with the plaintiffs, by which they were to act as agents in selling goods, wares, and merchandise manufactured by him, to be consigned and shipped to them for sale, and were to use due diligence selling the same, and in exhibiting and offering the same to purchasers, and offering facilities for selling the same, and were to obey the reasonable directions of the defendant in regard to the sales; that subsequent to the date mentioned the defendant gave directions which were reasonable, and which, if obeyed, might have resulted in a sale of the goods at the prices mentioned; that plaintiffs did not use reasonable diligence, but unreasonably delayed and neglected to sell the same in accordance with the directions and with the terms of the contract, and sold certain goods, without authority or direction, at less than the prices at which the plaintiffs were directed to sell the same, and at prices less than their market value; that they never accounted for certain goods so placed in their hands; and "that owing to plaintiffs' neglect and misconduct in and about selling said goods as directed, and making sales of same at less prices than directed, under and in accordance with said agreement, and at less than their market value, defendant was prevented from obtaining for goods of the same character prices which he otherwise would have obtained, and also lost many sales thereby, and was otherwise damaged; and that defendant, by and on account of said neglect and misconduct on the part of plaintiffs, as above set forth, suffered damage to the amount of twelve thousand dollars."
The provisions of the Code (section 1013) authorize a compulsory reference to hear and determine all actions where the trial will require the examination of a long account; but the account must be the immediate object of the action, or the ground of defense. It must be directly, not collaterally, involved. Camp v. Ingersoll, 86 N. Y. 433. In that case Folger, J., refers to the case of Van Rensselaer v. Jewett, 6 Hill, 373, in which it was said that a case could not be referred, although there were many items of damage, unless there is an account between the parties, in the ordinary acceptation of the term, which is one made up of the dealings of the parties with one another, though the account may be that of one party only. The learned justice also refers to Kain v. Delano, 11 Abb. Pr. (N. S.) 29, where it was held that the account to be examined must be the immediate object of the action or the ground of defense, and must be directly, and not collaterally, involved. The plaintiffs' demand, clearly, does not involve the examination of a long account; indeed, there is no allegation to that effect. The defendant's counterclaim consists of numerous items, but they result collaterally from the agreement between the parties, which was to loan, advance, and sell on the one hand, and on the other to manufacture and consign for sale, and for the reason that they depend upon charges of disobedience in reference to the mode of sale, and are put expressly upon the charge with which the answer concludes, namely, that the defendant had, on account of neglect and misconduct on the part of the plaintiffs, suffered damage. They are clearly matters not of account, but of damage resulting from alleged improper conduct. This theory in regard to references was carried out, also, in the case of Untermyer v. Beihauer, 105 N. Y. 521, 11 N. E. Rep. 847, where it was said the fact that a bill of particulars had been furnished by plaintiff, specifying a number of items of damage, did not bring the action within the provisions of the Code; and further, in answer to an objection, that the counter-claim set up in the answer, although it might require the examination of a long account, would not make the action referable. The character of the action was to be determined by the complaint; the answer could not change it. Welsh v. Darragh, 52 N. Y. 590. And Townsend v. Hendricks, 40 How. Pr. 143, was cited and approved, holding that a defendant had a constitutional right to a trial by jury of the issues presented by the complaint; and he did not waive that right by setting up, in addition to his defense, a counter-claim. It seems to be clear, under these authorities, that this action is not one in which a reference can be enforced, even though the counter-claim might require the examination of a long account. The order should be reversed, with $10 costs and disbursements.