Steck v. Colorado Fuel & Iron Co.

• Decision Date: 24 April 1894
• Parties: STECK v. COLORADO FUEL & IRON CO.
• Court: New York Court of Appeals Court of Appeals

142 N.Y. 236

37 N.E. 1

STECK

v.COLORADO FUEL & IRON CO.

Court of Appeals of New York.

April 24, 1894.

Appeal from supreme court, general term, first department.

Action by Edward M. Steck against the Colorado Fuel & Iron Company. From a judgment of the general term (26 N. Y. Supp. 1119, mem.) affirming an order of reference by the special term, defendant appeals. Reversed.

Andrews, C. J., and Finch and O'Brien, JJ., dissenting.

James Stikeman, for appellant.

William C. Cammann, for respondent.

EARL, J.

The plaintiff's cause of action, as alleged in his complaint, is for his salary, as general manager of the defendant, at a stipulated price, for the quarter of the year ending December 31, 1892. The verified answer of the defendant gainsays and puts in issue all the material allegations of the complaint, and alleges counterclaims consisting of long accounts. It is conceded that if the plaintiff's cause of action had been merely put in issue by the answer, the action could not have been referred without the consent of both parties, and that either party demanding it would have been entitled to a jury trial. But the contention of the plaintiff is that because the counterclaims involve long accounts, therefore the action may be compulsorily referred, and all the issues therein tried before a referee. The question is thus presented again to this court whether, where the cause of action alleged in the complaint is not referable, the action can be made referable by anything which appears in the answer. We have several times answered this question in the negative, and we should do so again. At it is sought to distinguish this case from our prior decisions, to which I will hereafter refer, and as we differ among ourselves, it becomes important, more particularly than ever before, to examine the grounds of those decisions, and to give somewhat fully the reasons for our present conclusion.

It was provided in the state constitution of 1777 that ‘trial by jury in all cases in which it has heretofore been used in the do so again. As it is sought to distinguish remain inviolate forever,’ and that provision is contained in all the revisions of our constitution since that time. We have, therefore, to determine whether such an action as this could, prior to 1777, have been referred to a referee for trial without the consent of the parties. References of actions pending in the common-law courts for trial before referees were not known to the common law, and, so far as they are now authorized, they are particularly provided for by statutes. Under the Dutch rule in the colony of New York, actions involving long accounts could be referred to arbitrators or referees, and such a reference was a very common mode of trial during that period. But it was not pleasing to the English colonists, who had received the trial by jury from their ancestors,-a priceless heritage secured by Magna Charta,-and hence, some years after the capitulation of the Dutch to the English in 1683, by the charter of liberties and privileges granted by the Duke of York to the inhabitants of New York, it was provided ‘that all trials shall be by the verdict of twelve men.’ See Charter, Append. No. 2, 2 Rev. Laws 1813. Thereafter, all actions in the common-law courts of the colony were triable before juries, except the action of account, and that was applicable only to a limited class of cases, involving the examination and taking of accounts. It was one of the most difficult, dilatory, and expensive actions known to the law, and was very rarely resorted to. McMurray v. Rawson, 3 Hill, 59; Magown v. Sinclair, 5 Daly, 63. The difficulties attending the prosecution of such an action were such that the practice became general for merchants and others having long accounts to enforce their collection by actions of assumpsit, which were always then triable by jury. But the embarrassments attending the trial of such actions by jury were such that December 31, 1768, an act (2 Van Schaick's Laws N. Y. 517) was passed, with a preamble as follows: ‘Whereas, instead of the ancient action of account, suits are of late, for the sake of holding to bail, and to avoid the wager of law, frequently brought in assumpsit, whereby the business of unraveling long and intricate accounts, most proper for the deliberate examination of auditors, is now cast upon jurors, who at the bar are more disadvantageously circumstanced for such services; and this burden upon jurors is greatly increased since the laws made for permitting discounts in support of a plea of payment, so that by the change of the law and the practice above mentioned, the suits of merchants and others upon long accounts are exposed to erroneous decisions, and jurors perplexed and rendered more liable to attaints; and by the vast time necessarily consumed in such trials, other causes are delayed and the general course of justice greatly obstructed. Be it, therefore, enacted,’ etc., ‘that whenever it shall appear probable in any cause depending in the supreme court of judicature of this colony (other than such as shall be brought by or against executors or administrators) that the trial of the same will require the examination of a long account, either on one side or the other, the said court is hereby authorized, with or without the consent of parties, to refer such cause by rule, to be made at discretion, to referees, * * * and if the report or award of the referees, or of the major part of them, shall be confirmed by the said court, and any sum be thereby found for the plaintiff, judgment shall be entered for the same, with a relicta verificatione, as by confession with costs, if by law the plaintiff would have recovered costs, had a verdict passed in the same cause for the sum so reported to be due; but if, after payment pleaded, any sum shall be reported to be due to the defendant, and the award be confirmed, he shall have judgment and recover his costs. * * * And when such referees shall report that nothing is due from the defendant, and the report be confirmed, then judgment shall be entered as by non pross, and the defendant shall recover his costs, to be taxed, and such judgment be a perpetual bar.’ That was the first act in the colony of New York authorizing a reference in any common-law action. It was undoubtedly a tentative act, and it expired, by its own limitation, on the 1st day of January, 1771. It was revived and re-enacted by the act of February 16, 1771, and was to continue in force until February 1, 1780. It is evident that the people of this state parted with the trial by jury in any case with great hesitation and reluctance, as the temporary statute authorizing references was not re-enacted in 1780, and there was no such statute in this state from theat date until 1788, when it was again substantially reinstated. It was in force prior to and at the time of, the adoption of the constitution of 1777; and the question for our determination is whether, under it, such an action as this could have been referred. And I think it is very clear that it could not have been. The preamble to the act may be read for the purpose of ascertaining its meaning and scope, and from that it clearly appears that the lawmakers were then dealing with actions brought by merchants and others upon long accounts; that it was such actions, only, that were intended to be provided for; and that such actions, only, were intended to be sent to referees for trial. The provision is that an action could be referred when the trial would ‘require an examination of a long account, either upon the one side or the other,’ and therefore it may be conceded that when the trial would involve the examination of a long account, under the practice as it then existed, upon either side, a reference could be ordered. But when I have made this concession little progress has been made. We must determine under what circumstances a long account could appear in the answer of the defendant, so as to make the action referable when a long account was not set forth in the complaint, and that makes it necessary for us to examine the ancient law of set-off.

Set-offs in common-law actions were unknown to the common law. If a defendant had accounts or claims against the plaintiff, he could enforce them only by an action commenced by him against the plaintiff. Even if the plaintiff's accounts or claims were undisputed, and the defendant had accounts or claims against the plaintiff far in excess of those made against him, he could not offset them, but was obliged to enforce them by an independent action. That practice was not changed in England until the Acts 2 & 8 Geo. II., whereby set-offs were first authorized there. 3 Bl. Comm. 305; Barb. Set-Off, 24. They were authorized several years earlier in the colony of New York by the act, chapter 281 of the Laws of 1714 (1 Colonial Laws N. Y. [Livingston & S. Ed.] 106.) In that act it was provided ‘that if any two or more dealing together be indebted to each other upon bonds, bills, bargains, promises, accounts or the like, and one of them commence an action in any court of this colony, if the defendant cannot gainsay the deed, bargain or assumption upon which he is sued, it shall be lawful for such defendant to plead payment of all or any part of the debt or sum demanded, giving notice in writing with the said plea of what he will insist upon at the trial for his discharge, and give any bond, bill, receipt, account or bargain so given notice of in evidence, and if it shall happen that the defendant hath fully paid or satisfied the debt or sum demanded, the jury shall find for the defendant, and judgment shall be entered that the plaintiff shall take nothing by his writ and shall pay the costs; and if it shall appear that any part of the sum demanded is paid, then so much as is found to be paid shall be discounted and the plaintiff shall have judgment for the residue only, with costs of suit; but if it...