Brennan v. Gale

The action, though nominally for an accounting, was essentially to recover rent due under a lease. The object of the accounting was to ascertain the amount of rent due under the terms of the lease. By this instrument the defendant rented from the plaintiff the San Remo Hotel for a period of ten months, agreeing to pay therefor $3,000 per month absolutely. He also agreed to pay the surplus income derivable from the conduct of the hotel to the extent of an additional $1,000 per month. To effectuate this part of the agreement, it was provided in the lease that the defendant should render monthly statements to the plaintiff relating to the business of the hotel, and should pay as rent the surplus of receipts over expenditures as shown by these statements. It is conceded that the defendant has paid the entire rent of $3,000 per month for each of ■the ten months specified in the lease, and has also paid $6,000 on account of surplus income. The action is based upon the claim that an accounting as to the receipts and expenditures of the hotel will show that there was enough surplus income to require the payment of the remaining $4,000, or some part of it. The defendant in his answer admitted the lease, but denied the performance by the plaintiff of its conditions. He also denied failure to render accounts as required by the lease, or that he individually entered into possession of the premises, alleging on the contrary that, as he is advise'd and believes, he and the plaintiff were in possession thereof as copartners. As an affirmative defense, he alleged the making of an arbitration agreement for the settlement of this as well as other disputes, and that the arbitration is still pending. The course of the trial was somewhat peculiar. It consisted largely of a colloquy between the learned trial justice and counsel, looking to a summary abbreviation ■of the trial, and a reference to take the account required to ascer*398tain the surplus income. The only evidence which the plaintiff gave was that he had received as rent but $36,000 for the ten months; that there was iio “proper accounting” between the parties,, or voluntary settlement, and that he. claimed there, was still $4,000 due him. The learned court declined to go into the question of partnership or account stated. He, however, permitted the defendant te show the arbitration agreement alleged in his answer. The evidence, thereafter, was practically confined to this latter’question. When it was closed the learned justice stated that, as the arbitration had not resulted in an award, the plaintiff had a right to-withdraw from, it, and he intimated that the effect of the evidence was to establish such withdrawal. He then directed that what he styled an interlocutory order of reference be drawn, and accordingly the order appealed from was prepared and signed. The order was not a decision of .the action in whole or in part. It recited that it appeared to the satisfaction of the court that the plaintiff was entitled to have-the defendant account, and that, the examination .of a long account Would be involved. It then directed the reference to take and state "the account, specifically excepting,, however, the questions of arbitration and account stated.' No further direction was made as to the trial of the action, either before court or referee.

We think "this order of ref erence was unauthorized. The learned court was required to make a decision establishing the rights of the parties upon the pleadings and proofs. The recital in the order was not such a' decision. He should have found that the plaintiff was, or was not, entitled to an accounting; that the ■ arbitration .agrees ment did, or did not, affect the plaintiff’s right to such accounting# and generally upon all the questions, submitted to him. Upon a decision in the plaintiff’s favor upon such questions, either with or without separate findings of fact and conclusions of law, the learned court might then have appropriately referred the accotinting, and directed that the plaintiff have judgment for the amount of surplus income found thereupon, not exceeding $4,000. The error was in directing the accounting without deciding that the plaintiff was entitled to it, and without passing upon the question of arbitration, or any of the other questions in the .case. •

The order cannot be treated, independently of the trial, as a reference to decide the whole issue or any of the issues. There was *399no motion for a reference in the ordinary sense. The reference was-ordered at the close' of the trial upon the judge’s own motion. Indeed, the learned counsel for the plaintiff stated upon the trial that he had previously made application for a reference, and that the court had determined that there were questions of fact that ought to be disposed of before the plaintiff went to a reference. But even if thé order could be treated as made independently of the trial, it would be impossible to sustain it, as there was no evidence that the? trial would require the. examination of a long account.

In no view of the case can this order be sustained. Its effect was to cause a mistrial.

The order, appealed from should be reversed, with costs, and the action remitted to the Special Term for a new trial.

Van Brunt, P. J., Rumsey, Patterson and O’Brien, JJ.f concurred.

Order reversed, with costs, and the action remitted to the Special Term for new trial.