Case Name: PRATT a. STILES
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1859-03
Citations: 9 Abb. Pr. 150
Docket Number: 
Parties: PRATT a. STILES.
Judges: 
Reporter: Abbott's Practice Reports
Volume: 9
Pages: 150–158

Head Matter:
PRATT a. STILES.
Supreme Court Seventh District;
General Term, March, 1859.
Redemption.—Costs.—Reference.
Although after default in the condition of a chattel mortgage, the mortgagee has the legal title, yet, until foreclosure or sale, the mortgagor has a right to redeem, and may enforce bis right by action brought within a reasonable time.
In an action to redeem, tried before a referee, the question of costs is in his discretion.
The mortgagee in a chattel mortgage, who has unreasonably refused to allow the mortgagor to redeem, 'is chargeable with the costs of the action to redeem.
The right to redeem chattels, as much as to redeem real property, carries with it the right to an accounting for profits up to the time of the decree.
After the referee, to whom it has been referred to try the whole issues in the cause, has made and delivered a final report, it is irregular to refer the cause back to him to take evidence and report upon a matter omitted in the trial,— e. g., in an action for redemption, to take an accounting of rents and profits— and then to enter judgment upon both reports. A judgment so entered should be reversed on appeal.
The proper practice would be to apply for a new trial on the ground of the omission.
Appeal from a judgment entered on two reports made by a referee.
This was an action to redeem, brought by the plaintiff, the mortgagor of chattels against P. and S. Stiles, the former of whom held the mortgage by assignment from the mortgagee, and the latter of whom had purchased, or claimed to have purchased the mortgaged property from him. The property consisted of two horses.
After default on the part of the mortgagor, the mortgagee sold the mortgage to the defendant P. Stiles, who thereafter verbally agreed with the mortgagor, on an extension of the time of payment. On the day appointed, the defendant P. Stiles took possession of one of the horses, and demanded the other. The mortgagor tendered the amount of the debt and interest in bank notes, but he refused to take it, saying he did not take rags, but that if it was gold he would not take it; that it was too late, and that he had sold the horses to his brother (the co-defendant in this action), and he then took possession of both horses. A day or two afterwards the plaintiff tendered the amount in gold to both defendants, and to P. Stiles individually; and it being refused, deposited it in bank to the order of defendants. Some eight months afterwards the bank suspended ; and to save the deposit, the plaintiff took from the bank a note of a third party for it.
The circumstances of the alleged sale were such that the referee held it collusive, and as against the plaintiff void.
The action was commenced in December, 1856, a few days after the tender had been made, and the complaint asked that the plaintiff be allowed to redeem, but did not demand an accounting for or payment of any compensation, for the use of the horses after the tender.
The whole action, and all the issues therein, were referred to a sole referee, who proceeded with the trial, and in March, 1858, made a report to the effect that the plaintiff was entitled to redeem, and that the defendants should be charged with the costs of the action, as having unreasonably refused to allow him to redeem, and put him to his action; and he directed judgment for the plaintiff, with costs.
In April following, after the delivery of the report, the plaintiff, on notice at special term, moved for and obtained an order referring it back to the referee, “ to take proofs and account of the use of the horses mentioned in the complaint, since the defendants came in possession of them, and to report the value of such use.” The motion was founded upon an affidavit that the referee had made his report, and that it appeared on the trial that the defendants had had possession and use of the property of which redemption was sought, and that the referee had charged the plaintiff with interest on the mortgaged debt, but had not charged the defendants for the use of the property.
The referee proceeded under this second order, took testimony, and reported the value of the use of the property. Judgment was entered up for the plaintiff upon both reports, in accordance with their conclusions. The defendants now appealed from this judgment to the general term.
J. P. Faurot, for the appellants.
I. The referee erred in deciding that the sale from P. to S. Stiles was collusive. There could be no collusion, for the property had become forfeited absolutely by the default. (9 Wend., 80, 258; 12 Ib., 61; 3 Den., 33; 6 Barb., 46.)
II. The tender could not revest the title (3 Den., 33; 12 Wend., 61): nor was it a sufficient tender. (Kortright a. Cady, 23 Barb., 490.)
III. If the plaintiff is entitled to redeem, it is a mere equity (see Dane a. Mallory, 16 Barb., 50), and should only be allowed on payment by him of debt, interest, expenses, and costs of action. (1 Paige, 48, 617; 4 Ib., 58, 526; 5 Ib., 9; 3 Mad., 255; 7 Ves., 583; 2 Scho. & L., 642; 1 Jac. & W., 197.) And see 2 Story’s Eq. Jur., § 1004; 3 Pan. Ch. Pr., 1225, 1226.
IV. Even if allowed to redeem, the plaintiff is entitled to nothing for the use of the property; after default, he had no right to possession. (16 Barb., 46.)
V. The defendant S. Stiles cannot be charged with its use, for the sale to him is treated as void.
VI. But the respondent did not claim any compensation for the use of the horses, in his complaint. It was not insisted on at the trial, nor was it part of the issue agreed upon between the parties, to be referred to the said referee, and the order obtained by the respondent, to have the referee report the value of their use, was without authority and void; therefore, the objections taken to the testimony, as to the value of the use, on the grounds stated by defendants on the trial, were well taken.
J. C. Smith, for respondents.
I. Although a mortgagee of chattels acquires an absolute title to them at law, on a default of payment at the day, the mortgagor still has a right of redemp tion which a court of equity will enforce. (2 Story's Eq. Jur., 348, § 1031 ; Ib., 349, note 1, and cases there cited ; Charter a. Stevens, 3 Den., 33 ; Hinman a. Judson, 13 Barb., 629; see also, Dane a. Mallory, 16 Ib., 46, 50, 54.) He may redeem after the law-day, at any time before his rights are foreclosed by a sale, on the part of the mortgagee. And reasonable previous notice of the sale to the mortgagor is indispensable. (Hart a. Ten Eyck, 2 Johns. Ch., 62, 100, and cases there cited.) And the sale must be bona fide. (2 Story's Eq. Jur., 349, § 1031, and cases cited in note 2.)
II. The sale to Stephen Stiles was void. The referee has found that it was collusive and void, and the tender found by the referee was sufficient; it extinguished the mortgage, and entitled the plaintiff to the relief asked in the complaint.
III. The plaintiff is entitled to costs. 1. The defendants refused the plaintiff’s tender. If the plaintiff had brought his suit without first making a sufficient tender, a different rule would have applied. (Slee a. Manhattan Company, 1 Paige, 48, 51, 81, and cases there cited; Brockway a. Wells, Ib., 617; Vroom a. Ditmas, 4 Ib., 527; Barton a. May, 3 Sandf. Ch., 450, 455-6.) 2. There was a fraudulent combination between the defendants, to deprive the plaintiff of his rights. (Henry a. Davis, 7 Johns. Ch., 40.)
IV. The allowance for the use of the horses, is proper, although not demanded in the complaint. The suit was commenced a few days after the tender, and no such claim existed at that time. The claim is for the use since the commencement of the suit. For that reason, the referee properly declined to consider it under the first order of reference. The manner in which the value of use was ascertained and allowed is, in all respects, equitable and regular. It is in accordance with the long-established practice of courts of chancery, in similar suits, respecting real estate, where it is common to refer to a master to take an account of rents and profits pendente lite, with a view to charging them to the mortgagee. (Vroom a. Ditmas, 4 Podge, 526, 536; Barton a. May, 3 Sandf. Ch., 450, 456.)

Opinion:
By the Court. —E. Darwin Smith, J.
The decision of the referee, that the mortgagor was entitled to redeem, was clearly right. Though the mortgagee has the legal title, and the law-day has passed for the payment of the money specified in the mortgage, yet, until foreclosure or sale, the right of redemption clearly exists in equity. If the mortgagee sells the property, he will be liable to refund the excess over the mortgage debt to the mortgagor. (3 Den., 33 ; 13 Barb., 630 ; 2 Story's Eq. Jur., § 1031.) But the bill to redeem must be brought within a reasonable time. (1 Ves., 278 ; 2 Johns. Ch., 100.)
No error, I think, was committed by the referee on the trial or decision of the cause. The question of costs was within his discretion, and I think it was rightly disposed of by him. The entire difficulty in the case, as now presented to the court, arises from the proceedings subsequent to the decision and report of the referee, upon the merits. The whole action, and all the issues therein, were referred to the referee for trial. He tried the cause upon the issues presented, and determined that the plaintiff was entitled to redeem, and ascertained and declared the amount he should pay to perfect such redemption, and decided that the plaintiff should recover the costs of the suit, and made, and signed, and delivered his report, directing final judgment. This terminated the jurisdiction and powers of the referee.
After he had so made and delivered his report, the plaintiff applied to the court, at special term, upon notice and upon an affidavit, simply setting out that the referee had made his report, and that it appeared, on the trial, that the defendants had had the possession and use of the horses named in the complaint, since the action was commenced, that the referee had charged the plaintiff with interest on the mortgage debt, but had not allowed any thing or provided any allowance for the use of the horses, and obtained an order referring it back to the referee, to take an account of the reasonable value of the use of the horses in question, from, the time of the commencement of the action.
Such order was executed, and the case on this appeal contains the proceedings and evidence upon such reference. The referee made a second report, in pursuance of such order, and final judgment was entered up, upon his direction contained in the two reports, and in conformity therewith.
The appeal from the judgment necessarily brings up for review the whole proceedings before the referee, and every thing which has entered into or formed part of the judgment, And the defendants' exceptions are sufficiently broad to cover all the questions relating to such proceedings.
The right to redeem personal property, as much as real estate, carries with it the right to have an account of the rents and profits of the mortgaged property while the mortgagee has been in possession, and pending the litigation up to the time of making the final decree. If this were not so, this right of redemption would, in most cases, prove a very barren right. The claim to redeem would be, in many cases, entirely defeated by a protracted litigation, if the law were otherwise. (II If. Y. If, 84.)
The right to have such an accounting, in respect to the rents and profits of the mortgaged premises or property, is incident to the right of redemption, and is part of the relief ordinarily given in such cases. It was within the scope of the duties of the referee to take such an accounting before the making the final deei'ee. It was part of the proceedings pertaining to the trial of the main issues before him, and essential to enable the refez-ee to do complete justice to the parties. If this case had been tried by one of the judges of this court at special term, I think, where the cause had so far proceeded that the judge was satisfied that the plaintiff was entitled to redeem, he would have made an interlocutoz'y order or decree to that effect, and referred it to a referee to take and state an account of the amount due the mortgagor upon the original indebtedness, and an account of the use and profits of the property since the mortgagee took possession thereof. On the coming in of the referee's report upon these matters, a final decree or judgment would have been ordered.
The difficulty in cases like the present, where the whole issues are referred to a referee, is to determine the manner in which he should proceed. In Palmer a. Palmer (13 Sow. Sr. S., 363), we held that it was within the discretion of the referee, and within his powers in a case in principle like this, to determine how he would conduct the trial.
In that case, which was a case of partnership, I suggested that the referee might make a special or separate report upon the main issue before taking the account. In this case, when he had determined that the plaintiff was entitled to redeem, I think he might have announced it, and that it would have been proper practice for him to have done so, and then, upon proper notice to the parties, to have proceeded to take the account in regard to the use and profits of the horses, and report what was due plaintiff, and determine upon the whole account what was justly and equitably due to the defendants, or to either of them upon such redemption, over and above a just allowance for the use of the horses. It does not appear that the referee was asked to take any such account. The plaintiff,'I think, should have offered this proof, and, if the referee had refused to take it, it would have been a good ground of exception.
Hot having made any such offer or request, and having gone through with the trial, and taken the referee's report upon the issues referred, I do not see any way in which the question can regularly be raised, except upon an application for a new trial. The report of the referee upon the whole case stands as the judgment of the court. It must be reviewed upon exceptions, like any decision of the court, at the circuit or special term, on the trial of a cause. The court, doubtless, had the power to set it aside for any irregularity, or to open the case for retrial before the referee, on the ground of surprise, mistake, or newly-discovered evidence. This is the only mode in which the omission of the referee, to take the account of the use and value of the horses, can now be rectified. The order of the court, referring it back to the referee to take such an account, I think, was an irregularity. The whole case must be opened for retrial before the referee, upon a proper proceeding, on application to the court for that purpose. If the plaintiff seeks to remedy the omission of the referee to take an account of the profits, &c., before the making of his original report, I can see no warrant for the course of proceeding adopted in this case, and think that the judgment should be reversed, and all proceedings, since the original report of the referee, made on the 29th of March, 1858, without prejudice to the rights of the plaintiff, to make such application to the court for relief as he may be advised. The question of costs should be also reserved, to be disposed of by the court upon any such application, if one is made.
J udgment reversed.
Present, T. E. Strong, Johnson, and E, D. Smith, JJ.
Ayrault a. Sackbtt (Supreme Court, Seventh District; Special Term, June, 1858).
Motion that the referee be directed to report for defendant.
The facts appear in the opinion.
J. Wood, Jr., for the motion.
S. Lord, opposed.
Johnson, J.—In Cleveland a. Hunter (1 Wend., 104), after the parties had submitted their cause, and the referees had retired, they called the parties before them, and informed them that they were desirous to hear further testimony on a question on which they were in doubt, and proposed to adjourn to a future day for that purpose. The plaintiff's counsel objected, but the referees adjourned to another day, and gave the plaintiff's attorney notice that they would proceed on such adjournment day, and hear further proof. On motion on behalf of the plaintiff to compel the referees to report without hearing further proof, the court denied the motion, holding that the referees had the right, after the cause was submitted, to open it and hear further evidence, and to adjourn for that purpose.
In Packer a. French (Lal. Supp. to Hill & D., 103), after the cause was summed up, and submitted, the referee intimated an opinion adverse to the plaintiff, as to one of the notes on which the action was brought. The plaintiff, thereupon, applied to the referee to open the case and hear further evidence on the subject. The referee, ascertaining that one of the defendant's witnesses had left, declined to open the case for further evidence, either at that time or at any subsequent time, on the sole ground that he had no power to do so. The court, on motion, held that the referee had power, and as he had placed his decision on that ground alone, let the plaintiff in on terms to give further evidence.
In Duguid a. Ogilvie (1 Abbotts' Pr. R., 145), after the cause had been submitted several days, the referee, on his own motion, opened the cause, and gave notice to the parties that he should allow the plaintiff to give further evidence as to the consideration of the note. The defendant's counsel objected, and the Common Pleas of New York held that the referee had the right to open the cause, and hear further evidence under such circumstances.
The decisions reported go, I think, to this extent, that the case is within the control of the referee until his decision is made, and the report is filed, or at least delivered to the successful party for that purpose. His decision is not made until his report is signed and delivered. At any time before this he may change, or modify it to any extent, in conformity with his better judgment. And as long as he has control of the cause I do not see why he may not open it for a further hearing, and receive evidence upon any question on which he may desire new or additional light.
The only objection to such a practice is, its liability to abuse in the hands of easy or facile referees, after parties have ascertained at what particular point the stress of the case lies, in the mind of the referee. There is no reason to aprehend any abuse in this instance, but referees, on the score of propriety, should be exceedingly careful not to expose themselves to such applications from either side, by advising them in respect to their conclusions in advance of the delivery of their report. Should the power be abused, the court would apply a remedy, after the report should be made, on the fact of such abuse being shown. In this case the referee certainly had not decided the cause. He had, however, come to a conclusion in his own mind, which he had expressed to the defendant's counsel, and which he had committed to paper in the form of an opinion. But this opinion was not binding upon him. He might have altered it, and formed and written a different one the next day, had his judgment so dictated, and neither party could have prevented it.
The referee having the power to open the cause for further evidence, the court will presume that he has exercised it prudently and discreetly, until the contrary is shown in a regular proceeding to set aside the report or judgment.
Motion denied, with $10 costs of opposing.
The defendant appealed to the general term, where, in December, 1858, the order was affirmed, the court holding that until the signing of the report by the referee, and notice of that fact to the party entitled to the report, he has power to reconsider the case. See the case at general term reported 17 Sow. Pr. R., 507. Compare also Gale a. Gwinits, 4 lb., 253, and Dorlon a. Lewis, 9 lb., 1.
Kennedy a. Shilton (New York Common Pleas ; General Term, April, 1858).
Appeal from an order of reference.
By the Court.—Hilton, J.—In March, 1850, as appears by the complaint, the plaintiff and defendant became general partners in contracting, as masons and builders, and which partnership the plaintiff now asks to have dissolved for reasons stated, and that an accounting shall be had and taken of the joint affairs and business, under the direction of the court.
The defendant having answered, the court at special term ordered that the issues in the action be referred to a referee to hear and determine the same.
From this order the defendant appeals, and insists, that because in his answer he alleges " that at or about the 1st day of January, 1852, the copartnership accounts of Kennedy & Shilton, as between the two partners, were adjusted and settled, and since that they have not taken any new contracts," the issue thus presented must be first tried and determined before an accounting can be ordered, or a reference had for the purpose of taking the account between the partners.
This, however, is a mistaken view of the effect of such an averment, because, conceding the fact to be as alleged, still the plaintiff would be entitled to have an accounting ordered from the time the accounts were so settled and adjusted.
The case is clearly one which the court at special term was authorized to refer, and it rested with the discretion of the court to grant or withhold the reference. (Code, § 271.)
Such an order does not involve the merits of the action, nor affect a substantial right, and there is no authority for its review upon appeal when it is made in a case like the present. (Code, § 349 ; Dean a. Empire State Mutual Insurance Company, 9 How. Pr. R., 69 ; Bryan a. Brennan, 7 Ib., 359 ; Tallman a. Hinman, 10 Ib., 89.)
Appeal dismissed, with costs.
That such an order is not appealable, see also Smith a. Dodd, 3 E. D. Smith's C. P. R., 348 ; Gray a. Fox, 1 Code, R. N. S., 334.