Court Opinion

ID: 3618411
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:00:55.204209+00
Date Added: 2024-06-11T12:43:12.135272
License: Public Domain

This action was brought to recover back money paid on a transfer of twenty shares of the Huguenot Bank, on account of false and fraudulent warranty and representations and concealment as to the condition and value of the stock and assets and protested paper of the bank. The case was referred to a referee. The evidence was conflicting. The referee found on sufficient and apparently preponderating evidence, that the alleged representations were made; that they were false in fact; that they were in effect fraudulent, that is made with knowledge on the part of the defendant of their falsity; and that the plaintiff relied upon them in making the purchase *Page 38 
of the stock. The supreme court at general term, affirmed the judgment. I discover no ground upon which on the merits this decision can be disturbed. Even if it were open to review in this court upon the facts, the evidence is of such conflicting character, as makes it proper to sustain the decision of the original tribunal on the question of facts.
The real difficulty, if any, arises on the admission of evidence by the referee, and in this particular he is supposed to have committed grave errors. The more important of these, as alleged, consist in the admission of evidence of the proceedings connected with the insolvency of the bank and the judicial declaration of that fact; the appointment of a receiver; his subsequent removal, and the testimony of the defendant taken before a referee in those proceedings. To determine these facts correctly, it will be necessary to look with some care into the case, and observe the manner in which, and the purposes for which this testimony was introduced.
The plaintiff having introduced his own testimony, and that of his son and one or two other witnesses, as to the representations and declarations of the defendant, and of a clerk of the bank as to its condition, assets, debts and papers, offered to read in evidence the testimony of the defendant, Nathan Lefever, taken before J.B. Jewett, the referee in the matter of the Huguenot Bank, in pursuance of an order granted therein November 9th, 1857, as reported by said referee in his report, dated November 19th, 1857.
"The defendant objected (to the offered evidence) upon the ground that it was taken after the suspension of the bank, and related to the condition of things then existing, and at the time of the sale of the stock, and that it was improper and immaterial to any of the issues in this action. The objection was overruled by the referee, and the evidence received, subject to any objection that might be thereafter raised to the same: to which decision the defendant *Page 39 
excepted. The plaintiff then offered in evidence a certified copy of the proceedings upon the re-establishment of the bank. The defendant objected to the introduction of the evidence, upon the ground of its immateriality, and that it was an improper mode of proving the misrepresentations alleged in the complaint. The referee overruled the objection, and admitted the evidence, subject to any objections on the part of the defendant that might be thereafter made; defendant excepted to the decision."
The proceedings thus far stated in regard to the offer, objection and admission of this evidence are stated in the language of the case. Immediately following this statement, and without any further or intervening matter, the case contains and gives in detail the following papers, apparently, so far as we can judge, forming one entire and connected series, to which a single certificate of attestation is attached. These papers are as follows:
1. A petition of stockholders of the bank stating its actual or apprehended insolvency, and praying for an injunction and receiver.
2. An order for a temporary injunction, and to show cause why it should not be continued and a receiver be appointed.
3. An absolute order of injunction and for receiver.
4. A petition praying for an order vacating the injunction and appointment of receiver.
5. Various consents of stockholders and creditors and others to such last named order.
6. An order of reference to Jacob B. Jewett to inquire and report as to the matters of the last named petition.
7. Notice of motion for an absolute order on said petition, and on the referee's report.
8. Report of referee last referred to, in which report is embodied the testimony of the defendant, Nathan Lefever, and the receiver, John Sleight.
9. An order vacating the order granting the injunction *Page 40 
and appointing the receiver, and making provision for taking the account of the receiver before the same referee with other directions.
10. Report of referee under last named order.
11. Certificate of referee that the receiver had complied with the requisitions of the last named order, and paid over the moneys in his hands.
12. Certificate of the clerk of Ulster county, that he had compared the foregoing with the originals on file in his office, and that they were true copies.
The only ground of objection made to the offered evidence of the defendant's testimony was "that it was taken after the suspension of the bank, and related to the condition of things then existing, and not at the time of the sale of the stock, and that it was improper and immaterial to any of the issues in this section." This, of course, did not embrace an objection to the form in which it was presented, as that it was one of a connected series of papers, and should be detached from the others; or that it was contained in a referee's report, instead of being established by original and independent evidence. Such objections are, therefore, waived.
This testimony of the defendant's declarations cannot be said to have been wholly incompetent and immaterial; for it contains evidence by the admission of the defendant of his official position and connection with the bank — of its capital, its circulating notes, its securities, its indebtedness, its assets — at the time of the suspension of the bank, and of its collectable and uncollectable paper, all of which was pertinent to some of the issues in the case.
The objection to this testimony was, therefore, properly overruled, and the manner in which it was admitted by the referee, "subject to any objection that might be thereafter raised to the same," while it would not probably debar the defendant from availing himself of any direct substantial and unanswerable objection to the testimony, without *Page 41 
further specification, was at the same time a pertinent admonition, as well as a liberal suggestion to the defendant, that if he desired to make any technical or specific objection to the testimony afterwards, he might and must do so. None such was made.
The case does not show whether upon such decision the evidence was directly introduced. I infer not, for it did not immediately follow, and the case goes on to state, "the plaintiff then offered in evidence a certified copy of the proceedings, upon the re-establishment of the bank." As before shown, the evidence of the defendant was contained in these proceedings, and it is fair to infer that one of the objects in offering them was for the purpose of introducing these declarations of the defendant. If so, and if this was one set of papers, forming a single record or proceeding, (and I think it was treated as such,) the evidence was admissible, notwithstanding it embraced other papers inadmissible by themselves as independent evidence, but not objectionable as forming inseparable portions of a single document or connected series of papers on file, which could not be dissected or mutilated; which other papers it is perfectly obvious were never intended to be used as primary evidence in themselves of the facts recited in them.
These proceedings may have been offered for another purpose, to wit: for the purpose of showing the insolvency of the bank, judicially declared, and the appointment of a receiver within less than a month after the representations of its soundness and solvency were made by the defendant to the plaintiff. These judicial proceedings were averred in the complaint, and were, therefore, proper to be proved. The proceedings upon the re-establishment of the bank themselves contained evidence — admissible evidence — of these proceedings, recognized the insolvency of the bank, the granting of an injunction and the appointment of a receiver, contained a certificate of the defendant of these facts, and also his testimony before referred to. They *Page 42 
were moreover connected with and a part of the proceedings taken to establish the insolvency of the bank, the granting of an injunction and the appointment of a receiver. They seem to me, therefore, to have been admissible, and to have been intended for one of the legitimate purposes before named. If designed simply to prove the re-establishment of the bank, they would be so wholly immaterial, indeed, so directly beneficial to the defendants, that I think we would be at liberty to overrule the objection on the ground that they could not by possibility prejudice his interests.
The referee saved to the party the right of subsequent specific objections, which not being made, we are at liberty to conclude the evidence was offered and received only for some of the lawful objects before mentioned; and I am not inclined to give effect to an objection technical in its character and failing to present itself in a clear and obvious aspect to the referee, himself a competent lawyer, for the purpose of overthrowing a decision which we can see was not unwarranted by the testimony in the case.
These remarks embrace, I think, all that is material to be specially considered in the points or argument of the counsel for the appellant. The objections to other portions of these proceedings, that the statements in the petition were mere hearsay; that the referee's unsworn statement was in effect received in evidence; that his estimates were allowed to have weight in the final disposition of the cause; that evidence was received of subsequent losses and compromises; that there was no authority in law for the introduction of a certified copy of proceedings of that character — with other minor objections suggested in the points or on the argument are all disposed of, I think, by the remarks already made, and are susceptible of one of two conclusive answers:
1. As to many of them the objections were not taken at the hearing. *Page 43 
2. As to all of them the papers were not admitted or used for any such purpose, as is assumed in the objections.
I think, on the whole, that the merits of the case were fairly tried; that no well founded objections to the evidence appear in the case or were fairly presented to the mind of the referee; and that the judgment of the court below ought to be affimed.
DENIO, Ch. J. concurred with HOGEBOOM, J. Judgment reversed. *Page 44