In re the Controversy Between Crosby & Day

The application for the appointment of a referee, under the statutes to which reference will be presently made, was made while an action was pending between the receiver and the defendant in relation to the subject-matter of the action. The application was, however, granted upon condition that the action referred to should be discontinued, and it was discontinued. The claim rests upon notes made by the defendant, and given in part payment for the purchase of stock; and his defense -was that he was induced to purchase, by means of false and fraudulent representations made to him by the president of the United States Glass Company as to the financial condition of the company, and that the notes, therefore, were given without consideration. The defense involving the charge of fraud secured, the appellant thinks, a right to a trial by jury, and he insists that the appointment of a refei’ec against his consent, and in opposition to his express objection was therefore a violation of a constitutional privilege. In this he is *293mistaken. The statutes authorize the proceeding which culminated in the appointment of a referee. (2 Edmunds’ Statutes at Large, § 36, p. 483; § 42, p. 484; §§ 68 and 73, pp. 490, 491; §§ 19, 20 and 21, p. 46.) The result of these various sections is that the receiver of an insolvent company has the power to settle any controversy that may arise between him and any person in the settlement of any demand against such persons, or of the debts due to the estate by a reference upon consent, or upon application to the court if consent be withheld. The validity and constitutionality of such a proceeding has been declared by the court of last resort and by its unanimous judgment. (Sands v. Kimbark, 27 N. Y., 147, and cases. cited.) The appeal from the order is for these reasons not available.

Upon the merits, it is’ not necessary to indulge in an elaborate review. The charges of fraud made by the defendant were not sustained, in the judgment of the referee, and a careful consideration of the evidence given, pro and con, does not justify us in declaring that the referee was mistaken or in error, in his estimate of the testimony, or his conclusions resulting therefrom.

If the statement of the defendant be accepted as truthful, it is undoubtedly clear that he should succeed in this controversy; but it was denied in all its material features by the president of the company, Mr. Green, by whom it was said the representations were made. There are, perhaps, circumstances corroborative of the defendant’s charge, but it must also be said that there are circumstances equally corroborative of the statements of Mr. Green, which, as just stated, were absolute denials.

The referee had in this case the great advantage of having seen the witnesses and heard them testify, and was susceptible, therefore, of impressions with regard to them, which cannot be reproduced or photographed by the perusal of recorded testimony.

We have had occasion to remark, in a case decided at the present term of this court, that in cases of conflict, and where the testimony may be regarded as balanced, it is just to yield to convictions arising from the advantage just referred to. (See Godfrey v. Moser, 66 N. Y., 250.) Under the circumstances, therefore, we cannot say that the findings oí fact by the referee were erroneous. We are obliged to declare, also, that none of the exceptions taken, *294on behalf of the defendant, require us, in the exercise oi our power and duty, to grant a new trial. The most important exception in the case is the supposed exclusion of any explanation on the part of the witness, who is apparently assailed by an article in the newspaper, to which attention was called on cross-examination and which was read to him. But the exclusion seems to have been predicated of the form of the question, and occasioned no prejudice to the witness or to the defendant’s case, because the witness was subsequently allowed to make any explanation or statement in regard to the article as fully as he desired, and availed himself of the privilege. We do not deem it necessary to consider in detail the other exceptions, but to dispose of them by the general observation that they are unavailable, unsound, or relate to subjects that could by no possibility affect the result.

The order and judgment should be affirmed.

Order and judgment affirmed.