MORAN against BOGERT

MORAN against BOGERT. Supreme Court, Second Department, Second District, General Term, February, 1875. Arbitration.—Evidence.—Bankruptcy. Where the services rendered to an estate extended over a space of' time prior as well as subsequent to the petition that the estate be declared bankrupt, the value of that portion of the services rendered prior to the commencement of the bankruptcy proceedings can not be set off in a suit by the assignee in bankruptcy, though the value of those rendered subsequent thereto may be. Where an arbitrator determined the question submitted to him in am informal manner, and without hearing a party, or appointing a time for a hearing, the arbitrator’s decision is not binding on the party,, and he may prove his claim anew. Where the referee in an action between the parties to the arbitrament, adopts the amount of the award therein as the reasonable value of a claim set up as a counter-claim disregarding the evidence before him, which all tended to show a higher value,—Held, that a new trial should be had, unless plaintiffs would consent that the amount of the lesser of the two estimates of the value put in evidence should be assumed as that to be set off to the defendant under the counterclaim. James H. Moran and Marcus L. Cobb, as assignees-in bankruptcy of Matthew D. Bogert, brought this-action in this court against Catharine Bogert, to recover the balance due on the price of certain horses, &c., sold March 8, 1871, to defendant by plaintiffs, and for interest on such balance. Matthew D. Bogert had made an assignment for benefit of creditors on March 5, 1870, the assignee under which had left the chattels afterward Sold as above, in the possession of the defendant, and they remained in her possession up to the time.of the sale. The petition in bankruptcy was filed August 11, 1870. '■ Defendant, after the sale, preferred a claim for keeping the animals from March 5, 1870, until the time of the sale, as an offset against the price, which was nine hundred and fifty-four dollars. Upon objection that the only offset the assignee could allow, was for the time since the petition in bankruptcy, a bill for five hundred and forty dollars for the keep of the animals from August 11, 1870, was presented. One hundred and fifty-four dollars of the purchase price was paid in cash and the balance, eight hundred dollars, was allowed to remain unpaid until the adjustment of the offset claim, the allowance of which was submitted to the register in bankruptcy. The register decided that two hundred and fifty dollars offset should be allowed, but without hearing the claimant or appointing a time for a hearing. After the sale a decree was made by the United States District Court in bankruptcy setting aside the assignment for the benefit of creditors, and adjudging the chattels in question to be a part of the bankrupt’s estate, but allowing the assignee for benefit of creditors the amount of the expenses he had been subjected to in his charge thereof. The damages laid in the complaint were five hundred and fifty dollars, the balance due on the sale after deducting the amount of the register’s award. The defendant set np a counter-claim for eight hundred and eighty-six dollars, for the keep of the animals from March 5, 1870, to the time of sale, and adding thereto the amount of the portion of the price already paid, claimed the excess of this sum total over the whole purchase price as due to her. The plaintiffs in reply, set up the award of the register as binding on the defendant. The cause was referred. The only witnesses as to the value of the keep, were two who testified for the defendant. The testimony of one of them made the value from the date of the petition in bankruptcy to the date of the sale, four hundred and nine dollars. That of the other witness indicated a still larger sum. The referee found for the plaintiff in the sum of five hundred and fifty dollars, with interest thereon from the date of the sale, holding that the defendant was bound by the award of the register, and also finding that the keep of the animals was reasonably worth the sum of two hundred and fifty dollars. Defendant’s counsel, on the settlement of the case, moved that the referee be ordered to find specifically on the cost of keeping each horse per month through the summer; each horse per month through the winter; each cow per month through the summer; each cow per month through the winter, &c., which motion was denied. The defendant’s counsel excepted to the report, and appealed from the judgment entered thereon. James A. Seaman, for the defendant appellant. The referee should have found specifically on the questions of fact, as requested (Snook v. Fries, 19 Barb., 313 ; Hulce v. Sherman, 13 How. Pr., 411; Honlahan v. Sackett’s Harbor R. R. Co., 24 How. Pr., 155; Van Slyke v. Hyatt, 46 N. Y., 259 ; Fabbri v. Kalbfleisch, 52 Id. 28 ; Rogers v. Wheeler, 52 Id., 262, 268 ; Quincey v. Young, 53 Id., 504). It was error for the referee to adopt the award of the register, since as register he could not make a decision binding on the defendant. If the register acted as arbitrator the award was irregular for not hearing, or giving an opportunity to produce testimony for the defendant (Elmendorf v. Harris, 23 Wend., 628; Jordan v. Hyatt, 3 Barb., 275 ; Knowlton v. Mickles, 29 Barb., 465 ; Garvey v. Carey, 4 Abb. Pr. (N. S.), 159 ; S. C., 35 How. Pr., 282 ; 7 Robt., 286, and cases cited in these). The referee’s finding as to the reasonable value of keeping the animals was not in accordance with the evidence. Abbott Brothers, for the plaintiffs respondent. No sum is due to the defendant from the plaintiffs for the keeping of the animals prior to the date of the petition in bankruptcy. Moreover such claim was withdrawn and waived. The referee not only adopts the award of the register, but also finds independently that the reasonable worth of the keep of the animals was two hundred and fifty dollars. The order of the court denying defendant’s motion to find specifically on Ms requests was proper. [MAJORITY — Tabeen J.] By the Couet.— Tabeen J. —This is an appeal from a judgment entered in Westchester county on the report of a referee ; the plaintiffs as assignees in bankruptcy sold certain live-stock of the bankrupt which was bought by the defendant, and this action is brought for a balance of the purchase money; previous to the assignees taking title to the property of the bankrupt, the defendant had possession of the stock on keep ; her bill for this keep, is a debt of the bankrupt, and can not be set off against the claim in suit. The assignees took title on August 11,1870; there was delay _ arising out of adverse litigations, and the live stock in question was left in defendant’s possession until the sale on March 8, 1871. She is entitled to recover for the value of the keep during this period, because it was an expense incurred for the benefit of the estate. The plaintiff proved at the trial that the defendant’s account had been left by agreement to the register in bankruptcy for adjustment, and that he determined that two hundred and fifty dollars would be a proper allowance, and the referee has deducted that sum from the purchase price of the cattle. Any such agreement would constitute a common-law arbitration, and would be binding as to the subject-matter arbitrated, but it appears that the arbitrator in an informal manner, and without hearing the claimant or appointing a time for a hearing, determined the claim. This mode of deciding or arbitrating the matter being irregular is not binding on the defendant, and she may prove her claim anew. The testimony as to the value of such keep was conflicting ; some witnesses adopted a higher, and some a lower rate; the referee rejected these rates, and adopted the sum of two hundred and fifty dollars for the reasons stated. There is testimony showing such value for the period stated to be four hundred and nine dollars and fifty cents. Some witnesses state a larger sum. If the plaintiff shall file the proper consent, allowing the difference of one hundred and fifty-nine dollars, the judgment may be reduced, and affirmed as reduced, and without costs to either party. Otherwise a new trial is ordered, costs to abide event. Present, Barnard, P. J., Tapper, J. (Dorohub, J., sat at the argument, but was not present when the opinion was handed down.)