In the Matter of Crosby v. . Day

| NY | Jun 1, 1880

The statute authorized the compulsory reference in this case. (2 Edm. Stat. 483, § 36; 484, § 42; 491, §§ 68, 73; 46, §§ 19, 20, 21.) Such a reference violates no constitutional right of the defendant. It was a case of a class, wherein before the adoption of the Constitution, a suit in equity would lie. The determination of the controversy between the parties was an incident to the winding up of the affairs of the insolvent corporation, and the distribution of its assets.

The principle that a jury trial could not be demanded as of right in a case like this was decided in Sands v. Kimbark (27 N.Y. 147" court="NY" date_filed="1863-06-05" href="https://app.midpage.ai/document/sands-v--kimbark-3605073?utm_source=webapp" opinion_id="3605073">27 N.Y. 147), and in the cases cited in the opinion of Judge DENIO. The jurisdiction of the court to order a compulsory reference does not depend upon the nature of the defense to the claim. Any controversy in respect to a debt in favor of or against the insolvent corporation may be so referred. (2 Edm. Stat. 46.) The fact that the receiver had brought an action at law upon the notes did not conclude him from afterward applying for a reference under the statute. The order of reference directed a discontinuance of the action, and it was in the discretion of the court whether costs should be allowed to the defendant. The order of the General Term, affirming the order of reference, should, therefore, be affirmed.

The defendant also appeals from the judgment, and relies upon exceptions to the rulings of the referee in respect to evidence.

First. The answer of the witness Frederica to the question as to his opinion of the value of a certain patent when it was obtained, disclosed nothing material. So far as it had any bearing on the case it was favorable to the defendant.

Second. The same witness was allowed, before the testimony was concluded, to testify fully as to the newspaper article, and the subject therein referred to. This obviated the error, if any, in the prior ruling of the referee, overruling the defendant's question calling upon the witness to state the circumstances in relation to the matter contained in the article.

Third. The question put on cross-examination to the witness Cornwall, whether from his examination of the books it was his opinion that the company was doing a legitimate business, may have been objectionable as calling for an opinion, but no ground of objection was stated. The fact was not immaterial, and if the objection was to the manner of giving it, the objection should have been put on that ground.

Fourth. The denial of the motion to strike out the answer of the witness Grant to the question as to what he said to defendant about the cash capital of the company, to the effect that he "told Mr. Day (defendant) exactly what was done," on the ground that he should state what was said, could not have prejudiced the defendant. It was followed by a particular narration of what occurred between the witness and Day. Fifth. The motion to strike out the testimony of the same witness that he told Day (defendant) what use witness was to make of the money received from Day, was properly denied. It already appeared that witness had informed Day it was to be applied in the purchase of a patent.

There are several other exceptions, but it is unnecessary to refer to them in detail. It is sufficient to say that we concur with the General Term, that they are "unavailable, unsound, or relate to subjects that could not possibly have affected the result."

The order and judgment should be affirmed.

All concur.

Order and judgment affirmed.