Court Opinion

ID: 5437423
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:56:28.460614+00
Date Added: 2024-06-11T08:31:53.424034
License: Public Domain

By the Court, Temple, J.:
This is a bill to obtain specific performance of a contract between Chater, Bond, and Gordon, whereby they agreed to incorporate for the business of refining sugar in San Francisco, with a nominal capital of one hundred thousand dollars, divided into one thousand shares. Each party was to take three hundred and thirty-three and one third shares, and pay twelve thousand five hundred dollars. Chater, having no means, was to give his notes for the amount, drawing interest at two per cent per month, and Gordon and Bond were to receive his stock as collateral, and thereupon raise or advance his share. The dividends on Chafer’s stock were to be applied to paying the interest and principal on his notes." The plaintiff asks a decree for one third of the stock, and the profits and dividends upon the stock.
An interlocutory decree was entered, adjudging that Chater was entitled to recover one third of the stock, and all *403“ duplications,' increase, profits, and dividends made or accrued upon said one third since the organization of said company.” That the plaintiff should pay twelve thousand five hundred dollars, with interest at two per cent per month, from the 1st day of September, 1856, and that an account be taken between Chater and the company, to ascertain the balance which might be due to either, and, thereupon, a referee was appointed “ to take the account of the profits, increase, and dividends of said stock belonging to plaintiff under his decree, and to state an account between the San Francisco Sugar Eefining Company and plaintiff.”
And it is further ordered that all further “ directions be reserved until after said referee makes his report, when either party is at liberty to apply to the Court, as occasion may require.”
The referee filed his report Hovember 3d, 1864, which he stated on account, and ascertained a balance due plaintiff" of eight thousand seven hundred and eighty-five dollars and fifty cents. Ho motion for a new trial was made upon the filing of this report, but within ten days after notice of the filing the defendants filed exceptions to the report, and on the nineteenth of December following obtained an order requiring the referee to file a statement of the evidence before him. . This additional report was filed July 1st, 1865. On the 21st of August, 1865, the exceptions to the report were overruled and the report confirmed. On the thirty-first of the same month notice of motion for a new trial was given. Upon this motion a statement was prepared and filed, and the motion denied on the 8th of February, 1868. An appeal was taken from this order, and is the first appeal in this case.
Afterwards, on the 26th of October, 1868, a final decree was entered, and thereupon defendants made another motion for a new trial, which was also denied, and the last appeal is taken from this order, and also from the judgment.
*404Objection was made in the Court' below to the consideration of the exceptions, on the ground that the action of the referee can only be reviewed on motion for a new trial under the one hundred and ninety-fifth section of the Practice Act. This position was sustained, and the Court refused to consider the exceptions. The Court also, acting upon the suggestion in Quivey v. Gambert, 32 Cal. 304, overruled both motions for a new trial, on the ground that notice of motion was not given in time, holding that the notice should have been given within ten days after notice of filing the report of the referee.
The interesting question of practice presented is to be decided entirely by the provisions of the Practice Act, unless that Act is silent as to the mode of proceeding in this particular case. It is thoroughly settled in this State that the mode of reviewing the action of the Court upon an issue of fact is the same, whether the case is at law or in equity— there must be a motion for a new trial; and the only question upon this point is, whether the proceeding before the referee was a trial within the meaning of the one hundred and ninety-fifth section of the Practice Act. That section, as it stood when these proceedings were had, provided that notice of intention to move for a new trial should be given, when the action has been tried by a jury, within five days after verdict; when tried by the Court, a Commissioner, or referee, within ten days after the notice of the decision of the Judge, or of the filing of the report of the Commissioner or referee. A trial may be said to be an examination and determination of an issue of law or fact. An issue arises when a fact or conclusion of law is maintained by one party, and is controverted by the other in the pleadings. (Sec. 153, Practice Act.) A determination of an issue of fact is the verdict or decision, which is sought to be set aside when a new trial is asked under the code. There must have been a trial of an issue raised by the pleadings, or the provisions *405of. the Practice Act, in regard to new trials, do not apply to the report of the referee. Evidently, therefore, if a collateral matter not raised by the pleadings be sent to a referee for the information of the Court, under the second and third subdivisions of section one hundred and eighty-three of the Practice Act, a motion for a new trial is not necessary to bring the action of the referee before the Court for review. In case, for instance, of an action by the vendor to compel the specific performance of a contract for the sale of land, all the issues might be tried before the Court; and, in case the performance of the contract be adjudged, a referee might be appointed to ascertain if the property had been incumbered. The referee might be called to try a contested question; but it would not be the trial of an issue, and the decision of the referee would not be binding upon the Court until adopted by it. It would not be such a decision as would necessitate a motion for a new trial by the aggrieved party, within ten days after notice of the filing of the report. So of the numerous cases cited by the counsel for appellant, where a collateral matter is sent to a referee or Commissioner for trial. The finding of a referee in such a case is not the finding of the facts, which takes the place of a special verdict, as indicated in section one hundred and eighty-seven of the code. That section distinctly provides for a different practice, where the issue is upon the whole case, and where the referee reports the facts. In the former case the report stands as the decision of the Court; in the latter it has the effect of a special verdict. The necessary inference is, that in other cases, not mentioned in the section, the report has neither the effect of the decision of the Court nor of a special verdict. The provision in that section, that the decision of the referee may be excepted to and revised in like manner as if made by the Court, has reference to what immediately precedes *406it, and is confined to those cases where the report stands as the decision of the Court.
The only difficulty in this case is in determining whether the matter referred was the trial of an issue made by the pleadings. It may be argued, with plausibility, that the taking of an account, and the ascertainment of a balance due, was within the issues made by the pleadings, and that, when the case had been partially tried by the Court, and the interlocutory decree entered, it was sent to the referee to complete the trial; that upon the filing of the referee’s report all the issues of fact had been tried, and the findings of facts made, upon which a judgment could be entered. Under the ruling of Crowther v. Rowlandson, 27 Cal. 376, then was the time when proceedings for a new trial should have been commenced, dated from the notice of filing the report. c,
It is very true that an accounting was contemplated by the plaintiff, and is a portion of the relief sought by him. Still the issue raised by the pleadings upon this subject was his right to have an account taken, and the principles upon which the account should be taken, if at all, was not settled by the pleadings, but the accounting ordered may have been very different from that claimed. In this case the plaintiff might have claimed an account of the profits made by the company, while the accounts ordered may have been the dividends made. The referee, in taking the account and stating a balance, was not governed by the pleadings, but by the interlocutory decree. The question as to the correctness of his report was not, whether he had correctly tried the issue made by the parties, but whether he had correctly tried the question referred to him by the Court. His guidance was not the pleadings, but the order of reference. The issue had not been sent to him to try, but he examined a certain matter of fact under the instructions of the Court, and for the information of the Court before whom the trial *407was being had. If his report furnished the information sought, the Court could act upon it; otherwise a new reference might have been made, and so on, until the desired information was had. I think, therefore, the proceedings before the referee in this case was not a trial within the meaning of the one hundred and ninety-fifth section of the Practice Act. The motion for a new trial, therefore, made upon the confirmation of the report, was in time. If the report of the referee required confirmation, there was no irregularity in interposing objections to its confirmation. Ho method is provided for bringing the facts before the Court upon the hearing of such objections, and in the absence of any legislation upon the subject, the Court can, by its rules, provide the mode of doing so. It is not necessary to pass upon this question, however, in this case, as all the questions necessary for the determination of this appeal arise upon the motion for a new trial and upon the appeal from the judgment.
The confirmation of the report and the order that judgment be entered for the plaintiff was not the rendition of the judgment within the meaning of the three hundred and thirty-sixth section of the Practice Act, and of the decision in Gray v. Palmer, 28 Cal. 416. Something more remained to be done than the mere clerical duty of entering judgment. The Court had not pronounced judgment upon the facts found, or determined the particular relief to which they entitled the plaintiff.
The final decree, taken in connection with the report of the referee, plainly shows that the relief granted is inconsistent with the pleadings and with the interlocutory decree. The referee committed a palpable error in crediting the plaintiff with the undivided profits of the company. The plaintiff only asks to-be placed in the position he would have been in had the stock been issued to him as provided in the agreement between Chater, Bond, and Gordon. In *408that case he would have received only one third of the dividends, while his share of the undivided profits would be represented by his stock. So now, if he receives his share of the stock, he, by virtue of that stock, acquires his due interest in the undivided profits. The referee, however, has taken a profit and loss account of the transactions of the company, and credited the plaintiff with one third of the profits, irrespective of the question as to whether they have been divided, or are still retained by the company. The report shows that a small amount of profits only have been divided. Much the larger portion are still retained by the company, and is claimed to have been expended in improvements and in adding to the capital of the company. It is true the interlocutory decree speaks of “ duplications, increase, profits, and dividends” made or accrued upon said one third of the stock. The words “ duplication and increase ” may have been intended to refer to the addition to the capital stock of the company, but still it refers to the duplications, increase, profits, and dividends of the one third of the stock, which should have been 'issued to Chater. There is a manifest difference between profits upon certain shares of stock and the profits of the company. If the language of the decree, however, were doubtful, the relief asked in the pleadings and the nature of the action should remove all question as to what was intended.
The alternative report of the referee is also manifestly erroneous. I cannot comprehend upon what principle it can be claimed that a dividend of stock can be charged as so much money, especially when the plaintiff’ recovers in this very action his share of the stock divided.
The final decree is reversed, the report of the referee is set aside, and the case remanded for further proceedings in accordance with this opinion.