Merchants' & Manufacturers' National Bank v. Kern

Opinion by

Mb. Justice Fell,

The main contention of the appellant is that the court of common pleas was without power to set aside the referee’s findings of fact and to substitute different findings. The reference was made in accordance with the 3d section of the act of June 16, 1836, and all matters of law were reserved for the decision of the court; but it was agreed that the referee, after reporting upon all matters of fact in controversy, should report to the court lfis conclusions as to the law governing the case with a recommendation as to the form of judgment proper to-be entered. Subsequently the agreement for reference was amended so as to bring it under the act of May 14,1874. The action of the court in reviewing the findings of fact and entering different findings was based on the act of May 4, 1889, which is a supplement to the act of 1874.

The award of a referee under the act of 1836 is given the same effect as a special verdict, and the only exceptions allowed to the award are, (1) that the referee misbehaved; (2) that he committed a plain mistake in matter of fact or matter of law;, (3) that the award was procured by corruption or undue means. The power of the court in the correction of errors is limited to a reference back “ for such further or other proceedings therein as shall be expedient.”

The act of May 14, 1874, made no provision for hearing exceptions or otherwise reviewing or eorrectmg the decision of the referee by the court of common pleas. The appeal was directly to this Court. The writ of error brought up only questions of law, and for all purposes of review the judgment entered on the report of the referee was substantially the same as the judgment of the court on a case submitted to it without a jury under the act of April 22,1874: Jamison v. Collins, 83 Pa. 359; City of Philadelphia v. Linnard, 97 Pa. 242; Southern Md. R. R. Co. v. Moyer, 125 Pa. 506.

The act of May 4, 1889, makes a radical change in the practice in relation to the hearing of exceptions to the report of a referee. It provides that when exceptions have been filed with the referee his report and his action on the exceptions shall be reviewed by the court of common pleas, and the court is given power to confirm, alter, amend or reverse the report, or to send it back for further proceedings before the referee. The intention to establish by this supplemental act a new mode of procedure, and to give the court of common pleas full power of review, is very clearly expressed. The only basis for even a doubt upon the subject is found in Bruch v. Philadelphia, 181 Pa. 588, and there only in the fact that the decisions construing the act of 1874 were applied to a reference made after the passage of the act of 1889. There was no intention to construe the later act, and the fact of its passage was overlooked. There was no reference to the act in the briefs presented or in the arguments made, and the case was treated by counsel as coming under the act of 1874, and was so presented to the court.

The questions of fact involved in the case present unusual difficulties. The learned referee found that there had been no-fraud on the part of the garnishee, but held him liable to account for the value- of merchandise which had been pledged with him as collateral security for a debt due him by the defendants, for the reason that he had negligently sold it for an inadequate price. The market value of this merchandise and the amount due the garnishee by the defendants were the main questions of fact in dispute. The referee found that the merchandise was worth $43,825.70, and that the garnishee’s just claim against the defendants was $26,722.87. The court found the value of the merchandise to be $32,494.42, and that the amount due by the defendants, because of the assumption by the partnership of a debt for money loaned one of the members which had gone into the partnership business, was $38,902.08, and reduced the award accordingly.

An issue involving precisely the same questions that were raised before the referee was tried in the common pleas, and the testimony taken at that trial was used by the referee and was the basis of his findings of fact. The judgment entered by the court, allowance being made for interest, corresponds with the verdict of the jury in that case. We have then in an issue in which, because of the conflict of testimony and the questionable conduct of some of the parties, the truth is peculiarly difficult of ascertainment, on the one hand the findings of a most careful and competent referee, and on the other the findings of the learned judges of the court, fortified by their correspondence with a verdict of a jury. Nothing but a clear conviction that the court had erred would justify the setting aside or modification of its finding. A careful review of the testimony, while not removing all doubts as to the correctness of the conclusion reached, has not satisfied us that error was committed. The judgment is therefore affirmed.