113 N.Y.S. 201 | N.Y. App. Div. | 1908
Lead Opinion
The complaint alleges that the defendants as copartners were engaged in the business of manufacturing and selling silk fabrics and products; that prior to September 5, 1905, the plaintiff, skilled as a machinist and silk weaver superintendent, and skilled in the manufacture and sale of silk fabrics and products, had been in the employ of the defendants at their silk mill and plant in the manufacture of silk and the management of said plant; that on or about the last-mentioned day, the plaintiff then being in the employ of the defendants, the latter employed him as superintendent and foreman of their business, and to purchase portions of the raw material and sell the manufactured products, and promised to pay him a
The defendants having answered, the action was tried before the court without a jury, a jury trial having been expressly waived. The terms of the contract as alleged by the plaintiff were not controverted at the trial, but the litigation reduced itself substantially to the question as to how much, if anything, was due plaintiff under his contract. The parties introduced all their evidence, concluded the trial and submitted the case to the trial justice for determination. In his decision he found the facts as claimed by plaintiff except as to the amount of the recovery, which facts were substantially uncontroverted, and also found that a statement and account of the business of the defendants during the period between September 1, 1905, and August 1,1906, was necessary in order to determine the profits to which plaintiff was entitled, and directed that an interlocutory judgment be entered appointing a referee to take and state such account and determine the amount of such profits and that on filing the report of such referee final judgment might be entered thereon. From this interlocutory judgment defendants appeal.
There is no suggestion in the complaint that an accounting is needed or desired. From its allegations and from its demand for judgment a specific and definite'suin appears to'be due plaintiff. He expressly alleges a contract of employment for a definite term.
The trial justice correctly held this to be an action at law. It is an action to recover compensation for services measured by a certain proportion of the net profits of the employer’s business, and . that such an action is legal and not equitable in its nature even though an accounting may be necessary to detennine the amount of profits is well settled. (Smith v. Bodine, 74 N. Y. 30; Gee v. Pendas, 66 App. Div. 566 ; Gillespie v. Montgomery, 93 id. 403 ; McCullough v. Pence, 85 Hun, 271 ; Lee v. Washburn, 80 App. Div. 410; Black v. Vanderbilt, 70 id. 16; Everett v. De Fontaine, 78 id. 219 ; Moore v. Coyne, 113 id. 52; Chaurant v. Maillard, 56 id. 11.)
But whether the action be deemed one at law or in equity in. either case the only power of the court to oi'der a compulsory reference under section 1013 of the Code of Civil Procedure is limited to cases requiring the examination of 'a long account. (Thayer v. McNaughton, 117 N. Y. 113; Roome v. Smith, 123 App. Div. 416; Doyle v. Metropolitan E levated R. Co., 136 N. Y. 505; Standard Fashion Co. v. Siegel-Cooper Co., 44 App. Div. 121, 132; Camp v. Ingersoll, 86 N. Y. 433; Cayard v. Texas Crude Oil & Mining Co., 118 App. Div. 299 ; Jones v. Lester, 77 id. 174.)
In Thayer v. McNaughton (supra) it is said : “ It is not enough to justify a compulsoi’y reference that the case may, by possibility, involve the examination of a long account. There must be enough alleged or shown to justify an inference that that will be the course of the trial. The same rule applies to equitable as to legal actions. In neither case can a compulsory reference be ordered unless the trial will require the examination of a long account. In equity actions the reference may be of the whole issues, or any one of them, or to l’eport upon specific questions of fact. But the power of the court to order the reference is limited by the general condition contained in the first clause of section 1013, which is alike applicable to cases ti’iable by the court and cases triable by jury. (Camp v. Ingersoll, 86 N. Y. 433; Barnes v. West, 16 Hun, 68 ; Read v. Lozin, 31 id. 286.) ”
This reference has been ordered on the theory that an account is involved and the sole fnnctions-of the referee under the interlocu
An examination of this case- convinces us that a long account is .not involved within the meaning of section 1013 of the Code of Civil Procedure except possibly within very narrow limits, and that a reference is unnecessary, inexpedient and not subservient of any useful purpose. Plaintiff had complete access to defendants’ books, and on the trial produced a statement made by his accountant showing what he claimed to be the net profits of the defendants’ business during the period in question from September 1, 1905, to August 1, 1906. This statement fixed the net profits at $41,703.32. Defendants also produced a similar statement showing the. net profits as claimed by them to be $34,092.05. There is a remarkable uniformity in the respective items making up these two statements. The difference of $7,611.27 is mainly accounted for by one item of $6,992 in defendants’ statement credited to themselves, for interest on liabilities of the firm prior to September 1, 1905, the time of plaintiff’s employment. The propriety of that item presents solely a question of law to be determined from the evidence. There still remains a difference of $619.27 between the parties, as dis^ closed by theix respective statements, of which amount if entirely allowed as claimed by plaintiff, he would be entitled to one-third. Within these narrow limits there can be little difficulty in adjusting the .account. It is seldom that a litigation involving such, large transactions discloses such simplicity in arriving at a conclusion. Comparing the two statements item by item, which are not numerous, and with the aid of the testimony iii the case, very.little difficulty should be experienced inbarriviug' at a just and equitable
It appears that actions have been instituted against the defendants by different parties to recover damages for failure to deliver goods according- to agreements. The aggregate amount of the claims so made is $167,219. It is a vitally important question in this case whether plaintiff’s portion of the profits.is subject to these litigations in whole or in part. This feature of the case seems in a large degree to have influenced the trial justice in directing a reference. He says in his decision: “ The said difference grows in great part out of the claim of the defendants that said profits are subject to claims made in certain litigations pending against them, growing out of the alleged failure to deliver goods from said mill, while the ■ plaintiff contends that such claims arise wholly through the fault of the defendants in curtailing the product of said mill during the year 1906, and the sale of said mill prior to the first day of September, 1906.” Those litigations are not occasioned by reason of the fact that defendants sold their mill and went out of business, because in practically every instance the complaints in those actions allege that the goods were to be delivered by defendants prior to that time. It is the contention of plaintiff that defendants did not operate their mill to its utmost capacity, whereas defendants, on the other hand, assert that plaintiff took orders and made sales beyond such capacity. Some of the orders were taken on the day following the commencement of plaintiff’s employment and others were taken shortly thereafter. Evidence was introduced bearing on the productive capacity of the mill, and the court made a finding on that point.
In Camp v. Ingersoll (86 N. Y. 433) an appeal was taken from an order of reference to hear and determine. Chief Judge Folger, speaking for the court, said: “ It is not so easy to say that' it will
It seems very clear that the effect .of this pending- litigation against defendants on plaintiff’s claim is not properly the subject of a reference. In no • proper sense does it involve an account or-
Nor can the reference be justified under the last clause of section 1015 of the Code of Civil Procedure authorizing a reference “ to determine and report upon a question of fact arising in any stage of the action upon a motion or otherwise except upon the pleadings.” The' power thus authorized can be exercised only in equity actions and in respect to matters which are collateral to the main issue and whicli do not arise upon the pleadings. (Doyle v. Metropolitan Elevated R. Co., 136 N. Y. 505, 511; Camp v. Ingersoll, 86 id. 433, 437; Standard Fashion Co. v. Siegel-Cooper Co., 44 App. Div. 121, 132; Roome v. Smith, 123 id. 416.)
All the evidence which either party possessed bearing.on the question of damages was received. There was no suggestion at the trial that other evidence was desired or obtainable. The trial justice partly decided the case and his error consists in sending to a referee for determination certain questions which he should' have determined himself from the evidence before him. Under the circumstances it would seem that a new trial is not necessary but ■that entire justice can be done by remitting the cause to the trial
The interlocutory judgment should be reversed and. the cause remitted to the trial justice for determination of all questions, with costs to the appellant to abide the event.
All concurred; Kellogg, J., in memorandum.
Concurrence Opinion
I concur in reversal. The eighth finding of fact states the real issue of fact between the parties without deciding it. The court cannot send that issue to a referee under the name of an account-, ing. If the plaintiff is right upon that issue, it is immaterial how many suits are pending against' the .defendants or what the results of them may be; and the case at bar may properly. turn upon the present record. If, however, these claims represent .losses caused by the plaintiff’s management of the business, it may be more or less difficult upon the present record to determine what losses have been sustained. A judgment in favor of .the various claimants creates no new loss against the business, but might be evidence of what loss actually had taken place before-the action was brought. Such judgment, if binding upon the parties hereto, might be more satisfactory evidence than can otherwise be produced.
I think the case should be remitted to the court, the question mentioned in the eighth finding of fact should be decided,, and thereupon, unless the court shall grant, a motion, which may be made, to suspend tlie further hearing of the action until the further order of the court or to permit further testimony to be given, that the case be decided upon the present record.
Interlocutory judgment reversed and cause remitted to the trial justice for determination of all questions, with costs to appellant to abide event.