Brink v. Republic Fire Insurance

Daniels, J. These actions were brought upon four policies of insurance, to recover the amount of a loss sustained by fire within the terms of the policies. The loss resulted from the partial destruction of a single stock of goods, and the items composing it consisted of at least fifty-one in number. They all, however, arose out of one single event, and together constituted but a single demand. It was a loss by fire which the assured was entitled to — 552 — indemnity for, under the terms of the policies, and in no proper or legal sense constituted an account, as that term has been used in the statutes of this State, providing for compulsory reference. That term was simply designed to include actions involving the examination of accounts arising out of transactions of business or dealings between parties. The statute enacted before the Code was so construed, and the same terms precisely were used in the enactment of the Code. In construing the previous, statute it was held that a great number of items of damage was not sufficient to render an action of covenant referable, as one involving a long account (Thomas v. Reab, 6 Wend. 503); that an action for a bill of goods containing fifty items, delivered at the same time, could not be referred against the objection of one of the parties, because altogether they constituted, in reality, but one item (Swift v. Wells, 2 How. 79), and the same rule was applied to an action on a bill of lading containing eleven items (Flint v. Morehouse, 2 How. 173), and to an account consisting of seven items under two different dates. Smith v. Brown, 3 How. 8. These eases are decided authorities against the power of the court to support the references ordered in the present actions, for they unite in holding that an entire demand arising out of a single occurrence or transaction is not a long account within the legal meaning of those terms, as they have been used in the statutes providing for the reference of actions without the consent of all the parties. The only" authority found supplying even colorable support to a different view is that of Samble v. Merchants’ Ins. Co., 1 Hall, 560, where a reference was ordered in an action on a policy of insurance, because the loss consisted of a large number of items. But the objection was not raised in that case that the action did not involve the examination' of a long account. The reference was opposed simply on the ground that questions of law might arise which could not be disposed of by the referees; and that point was very properly overruled, for the reason that it appeared that the defendants only contested the extent of the loss incurred under the policy. ' The case, therefore, is not an authority sustaining the power of the court to order a compulsory reference in an action for a loss upon a policy of insurance. That point was in no way considered by the court. On the other hand, the case of Freeman v. Atlantic Mut. Ins. Co., 13 Abb. 124, which was decided by the general term of the first district, held in effect, that the power to order a compulsory refer — 553 — ence in such an action did not exist. The loss there consisted of the value of thirty-seven items, shipped at different times within three days. And it was held that the trial of an action for its recovery would not present the case of a long account, as that phrase is used in the statute providing for the reference of issues of fact, on motion of only one of the parties. The case of Levy v. Brooklyn Fire Ins. Co., 25 Wend. 687, supports the same conclusion. In that case the reference ordered at the circuit during the trial of the action was afterward vacated, on motion, by the special term. For reasons already assigned, these actions could not be lawfully referred against the plaintiff’s objection; for they were cases in which the right of trial by jury existed under the laws of the State, when the constitution of 1846 was made and adopted. That instrument, by section 2 of article 1, provided, that “ the trial by jury, in all cases in which it has been heretofore used, shall remain inviolate forever.” Under this provision, the class of cases which could properly be referred against the objection of either of the parties was incapable of being enlarged after its adoption. The effect of it was to perpetuate that right in all cases in which it had been previously used. No power existed, after that, by which, without the consent of the parties, that right could be in any way abridged or denied; for this provision became the paramount law upon the subject. It secured to parties in legal actions a very important privilege, which it is the duty of courts of justice, at all times, to carefully guard and maintain. The compulsory reference of any action within the protection of this constitutional provision is much more than a mere irregularity, which may be waived by submission to it, or which can only be corrected on appeal; for it involves an entire want of authority to give the case such a direction. Accordingly, what would prove sufficient to waive an irregularity would be without effect upon an order directing a reference without authority to make it. Proceeding under the order, with the trial of the action before the referee, would not, and should not, deprive the party unlawfully sent before such a tribunal of the objection that the order was made without authority; for such a proceeding is taken in subordination to the unauthorized order, and not for the purpose of accepting the direction given by it, or assenting to the surrender of the right to have the cause tried, as it should be, by a jury. It is necessarily of a submissive and somewhat compulsory character, taken in compliance — 554 — with the direction given in the order, haying none of the elements from which the waiver of an important constitutional privilege could consistently be inferred. A mere irregularity in the proceedings would be waived by subsequently entering upon the trial. But an entire absence of authority cannot be supplied in that manner. If it could, the right of trial by jury would be secured by an exceedingly slight and uncertain tenure. Where there is an entire absence of "authority to act, the party injuriously affected by the proceeding-may take the objection to it at any time, so long as he has not actually or constructively relinquished his right to do so; and merely advancing in an unauthorized and uncompleted proceeding cannot properly be attended with that result. Dudley v. Mayhew, 3 N. Y. 9; Stevens v. Phoenix Ins. Co., 41 id. 149. In the present instance, the case made by the defendant’s papers show that the trial before the referee has' never been fully completed by the submission of the cause to- him for his decision. But, on the other hand, further acts are shown to have been contemplated on the part of the plaintiffs before the cases are in readiness for a disposition of them by the referee. There is nothing to prevent the plaintiffs, therefore, from now insisting before him, that the unauthorized order conferred no power upon him of hearing the cases, and in the event of an adverse decision reviewing the point upon an appeal from the judgment. For such an objection may very well be taken before the consummation of the trial by a submission for the decision. No proceeding under the order has been completed with the plaintiffs’ acquiescence by any fixed or final result; and nothing consequently, has transpired from which it can consistently be mentioned that they have lost their right to insist upon their actions being tried by jury; while the motions made to be relieved from the reference are in direct conflict with the supposition that they have at any time been disposed to assent to the order depriving them of the right to such a mode of trial. And as long as no such assent can be presumed the right to a trial of that description must remain Garcie v. Sheldon, 3 Barb. 232. The orders made on the preceding motions should not be attended with the effect of preventing the plaintiffs from still insisting that their actions should be tried by a jury. For they neither question nor deny that right. They simply deny the motions for relief from, the reference, on the ground that the facts alleged in the moving papers were shown by the defendant to have no existence. No — 555 — consideration was given, and no attention directed to the circumstance that the reference was ordered in actions which the parties had the right to have tried by jury. But the motions were made on the sole ground that the referee had lost his power to decide by his failure to do that within the time for that purpose prescribed by the Code, which was found to be unsustained by the affidavits presented. Eor that reason the orders made on the decision of those motions do not now preclude the plaintiffs from availing themselves of their constitutional privilege of having their action tried by a jury, or render it the duty of the court to disregard that right as long as its existence has been made to appear by the affidavits produced on the part of the defendant by way of answer to the motion on which the order appealed from was made. While these affidavits showed that the plaintiffs were mot entitled to be relieved, for the reasons on which they endeavored to maintain their motions, they at the same time established their right to the relief applied for by the facts disclosed, which rendered a reference of the actions altogether improper. This conclusion is maintained by the defendant’s proofs, and as long as that is the case, no injury can be sustained by defendant by not requiring the plaintiffs to bring on their motion on that distinct ground. Eor it is apparent that the defendant could not properly contest the existence of the right which its own proofs disclose. There can be no propriety, therefore, in denying the relief the plaintiffs are thus shown to be entitled to, because it was not urged upon the attention of the court by whose direction the order was made. The motion was a direct proceeding to vacate the reference, as it was in Levy v. Brooklyn Fire Ins. Co., 25 Wend. 687, where Chief Justice Nelson, on motion, vacated the order because the case was one which the plaintiff had the right to have tried by jury. That is a direct authority in favor of the plaintiff’s right to have the reference vacated in the mode pursued in the present instance.—by motion at the special term. In ordinary cases a different rule of practice should be maintained. But where a want of power can be clearly shown, the inadvertent order may be properly corrected by a motion made to vacate it. Omitting to urge the true reason in support of the motion was no waiver of it, so long as the defendant’s papers plainly disclosed its existence. And the nature of the objection is such that it may be relied upon at any time, as long as it has not been actually, or con — 556 — structively, extinguished, nor waived by any completed subsequent proceeding. The law has settled the mode in which that may be done \ but nothing of that nature has yet transpired in the present actions. For simply proceeding with an uncompleted hearing, under a compulsory order, cannot reasonably be attended with that result. The order was one which affected a substantial right within § 349, sub. 3 of the Code; and for that reason it was appealable. Townsend v. Hendricks, 40 How. 143. And, as the special term should have vacated the reference and allowed the actions to be tried at the circuit, where a trial was once had without the least embarrassment arising out of .the number of the items, for the reason that such a trial was a matter of right of which the party could not, under the circumstances, be properly divested, the order denying the motion should be reversed, and an order entered restoring the actions to the circuit calendar for trial. ■ But, as the point on which this disposition is made was not taken by counsel, it should be without costs, and on the condition that the plaintiffs stipulate that the evidence of witnesses now absent from the State and used before the referee shall be read on the trial at the circuit, with the same effect as though they were personally present, but subject to all other pertinent objections. Davis, P. J., concurred.