Case Name: GEORGE F. DOW, et al., Plaintiffs and Appellants, v. JAMES DARRAGH, Defendant and Respondent
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1877-01-02
Citations: 10 Jones & S. 80
Docket Number: 
Parties: GEORGE F. DOW, et al., Plaintiffs and Appellants, v. JAMES DARRAGH, Defendant and Respondent.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 42
Pages: 80–87

Head Matter:
GEORGE F. DOW, et al., Plaintiffs and Appellants, v. JAMES DARRAGH, Defendant and Respondent.
I. OPENING CASE AFTER PARTY HAS RESTED.
1. Motion to compel referee to hear and determine to OPEN.
(a.) No power in the court to grant.
H. TRIAL BEFORE REFEREE TO HEAR AND DETERMINE, HOW CONDUCTED ; PRACTICE.
1. Opening case after party has rested.
(a.) Sound discretion. It rests in the sound discretion of the referee.
(5.) Review of discretion. Cannot he had on motion to compel the referee to open.
(e.) Discretion, when properly exercised.
I. When the party before he rested had full opportunity to discover the facts which he subsequently proposes to prove, and the evidence thereof, and after he rested his adversary departed for his place of business and residence in a distant country; it is a proper exercise of discretion to refuse to open the case to admit proof of such facts on an allegation that they were not discovered until after the departure -of the adversary.
Before Curtis, Ch. J., and Speir, J.
Decided January 2, 1877.
Appeal from an order denying a motion made by the plaintiff compelling a referee appointed “to hear” and determine ’ ’ the issues in the action to re-open plaintiff’s case after the plaintiff had rested, and after the defendant had returned to his place of business in India.
The motion was heard at special term, before his Honor Judge Sedgwick, who rendered the following opinion:
I am of opinion that the court has no power to grant this motion; but that while the case is on trial before the referee, the relief asked is placed by the Code within the discretion of the referee, acting as the court.
This decision being placed upon a want of power, the order is appealable.
Motion denied. Ten dollars costs to defendant.
The facts sufficiently appear in the general term opinion.
Stanley, Brown & Clark, attorneys, and of counsel for appellants, urged:
—I. The evidence which plaintiffs propose to produce before the referee is material, pertinent and competent. It is not cumulative; and no objection could have been successfully made to it had it been produced before the referee before the plaintiffs rested their case.
II. The, affidavits show conclusively that the matters proposed to be given in evidence were neioly discovered— discovered after plaintiffs had rested their case. The positive allegations in plaintiffs’ affidavit, that he as matter of fact discovered the fraudulent overcharge and omission to credit interest, after resting his case, are not denied: nor is there any denial that the fraudulent overcharge of defendant on the cocoa-nut oil was 3,400 rupees, nor that the interest on balances in defendant’s possession whrh ought to be allowed on the accounting is $5,000.
III. To refuse to permit plaintiffs to give on the accounting, evidence newly discovered of positive frauds of defendant upon them by overcharges and by omission of credits due to them, amounting to thousands of dollars, is a substantial denial of justice. It is not a matter for which plaintiffs could bring a new suit. If they could, the defendant is a non-resident and out of the jurisdiction, and service could not be obtained upon him. Besides, it is much more convenient to all parties concerned, that the evidence be taken on the present accounting.
Note. The action was brought for an accounting as to the business done between the plaintiff’s firm of George W. Dow & Sons, and the defendant, James Darragh, under a certain contract.
The trial of the action was commenced in November, 1874, at a special term of this court, before the Hon. J. J. Freedman. The main controversy upon the trial was as to the effect of the arbitration and award set up in defendant’s answer. The court decided that the award was indefinite in form, but so far as it had been executed and made definite by the acts of the parties, it would be upheld. The court further decided that inasmuch as it would be difficult to determine how far it had been executed without the talcing of the accounts between the parties, as to all matters and questions involved in the suit, an order of reference should be made to hear and determine the issues.
Under this decision the order of reference, in addition to referring the issues for hearing and determination, further ordered that the referee take, state and determine the accounts of and between the parties in accordance with law and equity.
The taking of the account was therefore involved in and a part of the trial of the issues.
The question as to whether, under an order of reference to take and state accounts wholly separate, and disconnected from the trial of issues, the court has not power to give directions from time to time as to the principles on which the account should be stated, or specially to direct certain matters to fee inquired into and taken into account, or even to direct specified items to fee charged or credited, does not appear to the reporters to have been involved in this case or passed on by the court.

Opinion:
Sedgwick, J.
IV. If the court will not grant the order applied for, then the plaintiffs are remediless; as no valid exception can be taken to the decision of the referee on appeal from the judgment (Barb. Ch. Pr. 631, bottom paging, note ; Fielden v. Lahens, 6 Abb. Pr. N. S. 341, opinion of Parker, J., in court of appeals ; Caldwell v. New Jersey Steamboat Co., 47 N. Y. 282, 295).
V. The court has power to order the referee to reopen the case and take the testimony. This action was brought in the superior court of the city of New York, —a court of record, having full equity jurisdiction. It is still pending in this court. The court has referred such of the issues in the cause as the court did not determine at special term, to one of its officers to hear and determine them, and has ordered that officer to toJce and state the accounts of the respective partners. But the court has not lost its power or control over the case, or in any way abdicated it. The referee is its own officer and agent, and subject to such orders as it may make in furtherance of equity and justice. It may, for good cause shown, remove a referee and appoint another, or take the case entirely into its own hands, and determine it without the aid of a referee. It has the power to remove an officer ; much more has it the power to regulate the action of the referee. In what case it will exercise such power is another and a different question. This power is not so much the creature of statutes as an incident to the general and necessary powers of the court- to administer justice. It should be borne in mind by the court that the suit is an equity suit, and the referee appointed to take and state the accounts has the same duties and is subject to the same control that the master was subject to in the court of chancery. Who ever heard it solemnly argued that the court of chancery was inferior in any point of power to the master which that court had appointed '( Yet it is argued that the referee has more power over the litigation than the court of equity which appointed him. We look in vain in the statutes for anything given by the legislature to the referee, making him, in any point, superior to the court, and the court below gave no reference to any such statutes (Ford v. Ford, 35 How. Pr. 321; Macpherson v. Ronner, 40 N. Y. Super. Ct. [8 J. & S.] 448.) The doctrine defendant's counsel contends for is highly derogatory to the court and extremely dangerous to suitors.
VI. Section 272 of the Code, headed "report to stand as decision by the court," does not take from the court .any power to order further testimony to be taken in a case like the present. But the present is not the case prescribed for, because it is not sought here to review the decision of the referee upon evidence upon the trial, but is in the nature of an application for a new trial upon newly discovered evidence which did not appear on the trial. And it is perfectly settled that such applications may be and are constantly made and granted on affidavits of matters dehors the record. A motion for a new trial on newly discovered evidence must be made before judgment. Nothing whatever is gained by waiting until after the referee has reported, and then moving to set aside his report. The court can do now what it could do then ; and it is much more convenient for all the parties, that the testimony be taken now, before the accounting is completed, than that the report should be set aside, and a new accounting had.
VII. Plaintiffs have been guilty of no negligence that should deprive them of their rights, in favor of one Avho has defrauded them in a trust-relation to them of a partner, in matters exclusively in his knowledge and under his control, which frauds were unlooked for and unsuspected by them until a month before they offered to prove them.
Blanchard & Miller, attorneys, E. L. Fancher, and Theodore F. Miller, of counsel for respondents, urged:
I. The court has a general supervision over its referees to annul and set aside its own orders of reference, where incompetency or impropriety are alleged against the referee (Bainbridge v. Livermore, 56 N. Y. 75, and cases there cited). This question, however, does not arise upon this appeal. The idea of any impropriety on the part of the referee was expressly disclaimed below. But the court will not interfere with the conduct of a case pending before a referee appointed to hear and determine, or with his ruling upon matters of discretion. Such a referee is the court; he alone can pass upon questions of discretion. He must exercise a sound judicial discretion, and where he grossly abuses his power his decisions are reviewable upon appeal, just as are those of a trial court where discretion is grossly abused. "The trial by referee shall be conducted in the same manner, and on similar notice, as a trial by the court" (Code, § 272). ' ' The mode of conducting its trial, therefore, must be within the discretion of the referee, so far as relates to all questions within the ordinary discretion of a judge on the trial of a cause" (Palmer v. Palmer, 13 How. 365; Pratt v. Stiles, 9 Abb. 153). The decision of the learned judge below was, therefore, correct, if the admission of the proposed new evidence was a matter of discretion with the referee.
II. It was a matter of discretion. It is purely a matter of sound discretion whether a judge or referee shall permit a party to introduce proof irregularly, or to re-open his case after resting. "H the testimony was closed the day before, it was discretionary with the court whether to open the case or not to receive the additional evidence, and the decision is not reviewable here. The withdrawal or absence of witnesses who might be called in reply, or other circumstances, may have rendered the decision proper" (per Church, Ch. J., Caldwell v. N. J. Steamboat Co., 47 N. Y. 295). "After plaintiff rests, it is a matter of discretion whether to allow the case to be re-opened" (Solomon v. Central Park, N. & E. R. R. Co., 1 Sweeny, 303; Burgen v. White, 2 Bosw. 92; Meyer v. Goedel, 31 How. 457; Ford v. Niles, 1 Hill, 300). The court had, therefore, no power to interfere. It would have been very unjust to the defendant had the referee received the proposed proof of "new claims," under the circumstances. The plaintiff had a longer day in court than is usually accorded to suitors. The defendant remained to meet the case made against him, and when it was closed and he had been fully cross-examined, he returned to India to attend to his neglected business.
By the Court.—Speir, J.
No incompetency or impropriety on the part of the referee is claimed on this appeal, nor on the motion below. It is not, therefore, a case where the court has a general supervision over its referees to annul and set aside its own orders. By section 272 of the Code, ' the trial by referee shall be conducted in the same manner and on similar notice as a trial by the court." The discretion of the referee, so far as it relates to all questions within the ordinary discretion of a judge on the trial of a cause, is the same. The relief asked for comes within the discretion of the referee acting as the court, and the learned judge was clearly right in placing his decision upon the ground of a want of power.
The referee exercised a sound discretion in refusing to open the case. The defenses were put in, as it appears, directly to meet the claims presented in the plaintiffs' case after the defendant had been detained fifteen months on the trial and had returned to India. The plaintiff had rested, and after the defendant's departure one of the plaintiffs, it is alleged, discovered new claims from the defendant's books of account, which had been in the possession of the referee during a period of nine months, and which they had examined during that time. It is a matter of discretion whether a case shall be opened after the plaintiff rests. In this case I fail to find any excuse for this long delay, and under the circumstances it would have been unjust to the defendant; especially, as the plaintiffs had already a sufficiently long day in court. The order must be affirmed with costs, &c.
Curtis, Ch. J., concurred.