Metropolitan Life Insurance v. Union Trust Co.

*257 Lewis, J. In this action the plaintiff insurance company seeks to recover damages allegedly sustained by having been induced by false and fraudulent representations made by the defendant trust company to purchase numerous mortgages on land in four townships near the city of Rochester. The action was severed as to the two corporations named as defendants and an order made allowing separate trials. In the action against the defendant Abstract Title and Mortgage Corporation, a motion by that defendant for summary judgment was granted dismissing the complaint upon the merits. (Metropolitan Life Ins. Co. v. Union Trust Co., 283 N. Y. 33.) The action now before us against the single defendant was referred to former Supreme Court Justice Eenest I. Edgcomb as an Official Referee “ to hear, try and determine ” the issues presented. Following the conclusion of hearings which had consumed forty trial days the Referee, by what he styled a “ memorandum ”, signed by him and filed in Monroe County Clerk’s Office on May 2, 1943, made the following direction: “ * * * the complaint should be dismissed with costs. Judgment is so ordered. Prepare findings in accordance with this memorandum and send me for my signature.” The Official Referee died on June 7, 1943, before proposed findings had been submitted by either party. Thereafter the plaintiff moved at Special Term to restore the case to the calendar by reason of the death of the Referee prior to the making and signing of formal findings and conclusions. Special Term denied that motion by order dated July 16, 1943, on which date the defendant-respondent entered judgment in its favor “ upon all the issues in this action and [adjudging] that the said action be * * dismissed ”. Following such entry of judgment the plaintiff moved to set aside the judgment or, in the alternative, for an order resettling the judgment by striking therefrom the words “ judgment against the plaintiff upon all the issues in this action ’ ’. Special Term denied the motion to vacate but amended the judgment to read: “ Adjudged that the defendant Union Trust Company of Rochester have judgment against the plaintiff dismissing the complaint herein on the merits ”. The plaintiff appealed to the Appellate Division from the original and amended judgments and from the two orders of *258 Special Term denying (1) the motion to restore the case to the calendar for trial and (2) the motion to vacate the judgment. The Appellate Division unanimously affirmed the judgments and orders and thereafter allowed the present appeal upon its certificate that a question of law is involved which should be reviewed by this court. Upon this appeal from the judgment entered upon the order of the Appellate Division we consider first the question whether the “ memorandum ” of the Referee was a “ decision ” upon which judgment could be entered. Procedure incidental to the decision by a referee is clearly . defined by the Civil Practice Act. A referee has powers equal to those exercised by a trial court without a jury (§ 469); his report must comply with requirements which prevail as to a decision by the court in a like case (§ 470); before a cause is finally submitted to a referee the attorney for either party may submit in writing a statement of the essential facts which he deems established by the evidence and of the rulings upon questions of law which he desires the referee to make. “ * * * At or before the time when the report is rendered, the referee must note in the margin of the statement the manner in which each proposition has been disposed of, and must file the statement thus noted; but an omission so to do does not affect the validity of the report ” (§ 471); the referee’s decision like the decision of the court — “ * * * may be oral or in writing and, except where a nonsuit is granted, must state the facts which it deems essential(§ 440) (Emphasis supplied.) In strict conformance with the statutory requirements for a referee’s decision the “ memorandum ” with which we are here concerned contained a detailed statement of the facts which the Referee deemed essential to his decision. The several contentions advanced by the plaintiff in support of its complaint and requiring proof of substantiating facts were in each instance followed by a conclusive, unequivocal statement of the Referee’s finding that the contention lacked evidentiary support. An example of the type of statement last above mentioned is furnished by the following — which refers to one of the plaintiff’s chief contentions: “ The evidence fails to warrant a finding of any willful withholding by the bank of knowledge pertinent to the sale of these mortgages, or to their value or *259 desirability, which it was in duty bound to disclose, or of any misstatement of a past or existing fact. Without such a misrepresentation, or something equivalent thereto, there can be no fraud, and nothing for the other party to rely upon. The misrepresentation being missing here, plaintiff cannot recover, and it becomes unnecessary to inquire whether the other elements required to sustain an action for fraud and deceit have been established.” When, in the closing paragraph of his ‘ ‘ memorandum ’ ’ the referee stated that “ * * ' * the complaint should be dismissed with costs,” which statement is immediately followed by the direction “ Judgment is so ordered,” we think the language so employed “ * * * carried direct and immediate legal consequences ” (Corr v. Hoffman, 256 N. Y. 254, 268) — one of which was that judgment might be entered thereupon as a ministerial act. (Rules Civ. Prac., rule 198; Corr v. Hoffman, supra, p. 263; Vogel v. Edwards, 283 N. Y. 118, 121.) The fact that in a written “ memorandum ” the Referee included a conclusive statement of his findings as to factual issues and a direction for the entry of judgment, qualifies that “ memorandum ” as a decision upon which a judgment was properly entered. (Tallmadge v. Lounsbury, 13 N. Y. S. 602, 603, affd. 126 N. Y. 655.) The decision in Smith v. Geiger (202 N. Y. 306) is not authority to the contrary. There, unlike our present case, the Referee (p. 307) “ found no facts * * * and gave no direction for judgment. ’ ’ Likewise in Ventimiglia v. Eichner (213 N. Y. 147), this court was careful to point out (p. 149) that there was no document by the trial court which directed the entry of judgment in accord with the conclusion reached. The appellant stresses the fact that in the “ memorandum ”, after the direction for the entry of judgment, appears the sentence —1 ‘ Prepare findings in accordance with this memorandum and send me for my signature.” We do not think the sentence last quoted above makes the Referee’s decision legally insufficient as a basis for the entry of judgment. The Referee specified that proposed findings, if any, must be “in accordance with this memorandum ” — a strong indication that he considered as final the decision embodied in that document. It must also be remembered that if, in response to the permissión thus given by the Referee, any party chose to submit *260 proposed findings at a time which was concededly long subsequent to the submission of the case, not only were they untimely (Civ. Prac. Act, § 471) but, had the Beferee marked proposals thus delayed, the privilege thus given would have been a favor, not a right. Had he lived to make any findings proposed by the plaintiff —■ which presumably would have been “ in accordance with (his) memorandum ” — they could not have affected the decision previously rendered in the case and the judgment entered thereon. (See Matter of Joroco Silk Corp. v. Nova, 265 App. Div. 1061.) In the circumstances disclosed by this record we do not find the conclusion to be warranted that the relationship between the appellant and the respondent imposed upon the latter a duty to disclose the cost of unpaid local improvements upon the mortgaged lands; nor do we find sufficient evidence to warrant, a finding that the respondent misrepresented to the appellant on mortgage applications that the cost of such local improvements had been paid. The judgment should be affirmed, with costs.