McCarthy v. Swan

C. Allen, J. 1. The agreement of reference did not have the effect to discontinue the plaintiffs’ action. It was not intended to take effect as a submission in pais; but as a reference in court. It is entitled as an agreement in the action which was pending between the plaintiffs and the defendant in the Superior Court. It is stated to be a submission “ in the above entitled action.” The referee was to “ report to said court.” Final judgment was to be entered in this action, upon the coming in of the referee’s report. The whole phraseology of, the agreement contemplated a reference as a step in the action, and as a means of determining the judgment to be entered in the action. The agreement therefore could not take effect as an agreement for a reference in pais, which would work a discontinuance of the action. Such was not the intention of the parties. 2. Sullivan was no party to the action, nor could he be. There was no pretence of an indebtedness of the defendant to the plaintiffs and Sullivan jointly. The claims of the plaintiffs [475] and of Sullivan grew out of the same matter, but they were in law distinct. Nor was there any agreement of parties by which the plaintiffs should be substituted as creditors of Swan, in place of Sullivan. Sullivan did not release Swan. Swan did not promise to pay to the plaintiffs whatever sum he might owe Sullivan. It was merely an agreement that the amount due to Sullivan, if any, should be ascertained, and included in a judgment in favor of the plaintiffs, but if nothing should be found due either to Sullivan or to the plaintiffs, then judgment should be entered for Swan, which judgment should have the same effect as though Sullivan were a party plaintiff. Under this agreement, if the referee should find that something was due to the plaintiffs, but that nothing was due to Sullivan, the plaintiffs would have judgment for the sum so found due to them; but no judgment could be rendered against Sullivan, and the stipulation did not include this contingency. It was contemplated by the parties that the claims of the plaintiffs and of Sullivan should be treated and passed upon separately, and they were so treated and passed upon. This agreement falls short of constituting a substitution or novation of parties; 2 Chit. Con. (11th Am. ed.) 1374; Derby v. Sanford, 9 Cush. 263; and indeed it has not been contended otherwise in argument. The effect of the agreement, therefore, was that the referee should hear and pass upon a new and separate cause of action, held by one who was not and could not be a party to the record, and make report thereon to the court. If application had been seasonably made to the court for a rule of reference upon this agreement, such rule could not properly have been issued, because neither Sullivan nor his claim was or could be before the court. Porter v. Dickerman, 11 Gray, 482. The court could, not give effect to such an agreement. A reference under rule of court cannot properly embrace the claim of a party not before the court. Nothing short of an agreement which would amount to a novation, by which the plaintiffs should be substituted for Sullivan as creditors of Swan, to all intents and purposes, and the claim of Sullivan extinguished, would enable the plaintiffs to declare in their own names upon this claim against the defendant, and to amend their pleadings by adding this new cause of action. Nothing short of this would make it proper to issue [476] a rule of reference embracing the claim' of Sullivan. None of the cases heretofore decided have gone further than to hold that other matters of controversy between the parties to the action may be included in a submission under a rule of court. Berkshire Woollen Co. v. Day, 12 Cush. 128. Commonwealth v. Pejepscut Proprietors, 7 Mass. 399, 417. Haskell v. Whitney, 12 Mass. 47. The agreement of the parties in this case, as in Foster v. Durant, 2 Cush. 544, cannot be carried into effect according to the rules of law. It is objected by the defendant, that a rule of reference should not be issued nunc pro tune, even if it might properly have been issued before the hearing; but we do not need to go into that question, being of opinion that it could not properly have been issued at the outset. The result is, that the judgment for the defendant must be reversed, that a rule of reference under the agreement must be refused, and that the case stand for further proceedings. Judgment reversed.