FIRST DEPARTMENT, JUNE TERM, 1898. [Vol. 31. made under oath and not impeached, that he had no knowledge or suspicion of the existence of the relation stated. We thus come down to the main question, whether or not the relation existing between the referee and the city of New York, by reason of the fact that at the time the referee was appointed to hear and determine this action, he was in the employ of the city as its counsel and was conducting important litigation for it, and continued performing such services and receiving large sums of money as compensation for them during the time that the action was on trial before him as referee, was consistent with the position of referee to hear and determine a claim against the city. If the city of New York was a private litigant, a manufacturing or railroad corporation, and the person having a claim against such a corporation had, in ignorance of the fact, consented to the appointment of the attorney or counsel for the corporation to act as referee to determine the validity and the extent of his claim, I apprehend that no court would for a moment hesitate to set aside any report that was made and vacate the order of reference, and that, irrespective of any consideration of actual influence exerted by the parties upon its own attorney or counsel in the litigation. The sole fact of the relation that existed between one party to the action and the referee would make it improper for the referee to occupy the position as judge, to determine the question of the claim against his client from whom he was receiving compensation for services rendered. The courts have again and again stated that the question upon applications of this character was not whether the attorney had been improperly influenced, or whether his conduct had been such as to show prejudice or partiality, but whether from the relationship of the parties or the acts of the referee it was possible that such influence had been exercised, or whether on account of such relationship, or for some other reason, the fairness of his decision could be justly questioned. This question was lately before this court in the case of Reynolds v. Moore (1 App. Div. 105), where Mr. Justice BARRETT, in delivering the opinion of the court, says: "The real question here was not whether the referee was guilty of actual corruption, but whether the fairness of his decision was justly questioned. It is the settled law of this State that any indiscreet action of a referee from which improper inferences can be drawn, suffices to App. Div.] FIRST DEPARTMENT, JUNE TERM, 1898. set aside his report." And the learned justice quotes the remarks of Judge HARRIS in the case of Roosa v. Saugerties & W. Turnpike R. Co. (12 How. Pr. 297): "All agree that the administration of the law must be pure and impartial. But it is scarcely less important that the conduct of those to whom its administration is entrusted should be such as to furnish to those who litigate no just grounds of suspicion;" and the remarks of DAVIS, J., in Livermore v. Bainbridge (14 Abb. [N. S.] 227): "The interests of justice demand that the general rules designed to prevent the suspicion of impurity in its administration should be rigidly adhered to." In the cases cited, as in this case, the integrity of the referee was not questioned. We can say of the referee in this case as was said by HARRIS, J., in Dorlon v. Lewis (9 How. Pr. 1): "The referee is a man of the most unquestionable uprightness. None sooner than he would have spurned an attempt improperly to influence his decision. A referee, under such circumstances, owes it to himself not only to avoid all improper influences, but even the appearance of evil.' Whether satisfied with the decision or not, no one should be left, for a moment, to question its fairness." The question, however, that we are to determine is, not whether this relation that existed between this referee and the city had influenced his decision, but whether it was such a relation as, under the circumstances, would justify a person in questioning the fairness of the decision. It seems to me clear that the relation existing between the referee and this defendant was such that the fairness of his decision upon the questions submitted to him might justly be questioned by a party to the litigation. The fact that the referee is a man of high character and unquestioned integrity should not be allowed to influence the determination of that question, for it is essential to the administration of justice that even the appearance of evil should be avoided, and where a man who accepts the position of referee has such relations with one of the parties to the litigation as to make it improper that he should decide the questions submitted to him, his character is not at all material; and the court will enforce that rule against a man of high character as well as against one whose character is not so good. Would the court be justified, upon such an application, in making a distinction between the character of one referee and another, and in sustaining the report in one case and refusing to sustain FIRST DEPARTMENT, JUNE TERM, 1898. [Vol. 31. it in another? What we have to determine is, whether the relationship as it existed between the referee and the city when the order of reference was entered, and as it continued during the time that the action was before him for trial, was inconsistent with his acting as referee to determine the action. Upon this question, the fact that the referee received the retainer from one of the parties prior to the time that he was appointed, instead of after his appointment, seems to me to be immaterial. Stebbins v. Brown (65 Barb. 272) was a case where, after the referee had been appointed, the plaintiff employed him to prosecute and collect demands against other parties, The court referred to the fact of the referee not having been counsel for the plaintiff prior to the time of his appointment as referee, and said: "The court does not deem it important to inquire whether the decision of the referee was or was not affected favorably to the plaintiff by his retainer in the matters above mentioned, for we regard such an inquiry as immaterial. We deem it our duty to place our decision upon the unquestioned fact that, while the referee was acting in the trial of this action as an officer of the court, he accepted the retainer of the plaintiff and became, in respect to other matters, his attorney and counsel. The rule should be inflexible that such a fact will, ipso facto, avoid the report of a referee. No other rule will protect the referee from the approach of temptation, or shield the administration of justice from the suspicion of impurity." Eliminating the question of the actual effect upon the referee by the retainer, it seems to me that the rule, as it exists, prohibits the appointment as referee of one who is actually the professional adviser of one of the parties as it prohibits his continuance as referee after his retainer by one of the parties when he was so retained after his appointment as referee. Nor do I think that the fact that the referee's client was a municipal corporation takes this action out of the general rule before referred to. From the referee's affidavit it appears that for twenty years he has been engaged in many legal proceedings in which the city was a party. and during such period he has been frequently retained as special counsel for the city; that he has been so retained by every corporation counsel during said period; that there has hardly, if ever, been a time in that twenty years that the deponent has not been a counsel for the city in some pending proceeding; that at the time the App. Div.] FIRST DEPARTMENT, JUNE TERM, 1898. reference herein was being heard by the deponent, he was acting as counsel and attorney against the city in several proceedings and actions to which it was a party; and that the deponent has during such period been counsel for the city in many large and important matters, which have attracted the attention of the public and have been reported in the public press. Thus he emphasizes the close relations that herein existed between himself and his client, the city. For twenty years he has been constantly employed as its counsel in various proceedings; and it seems to me that such a relation is inconsistent with the position of referee to hear and determine a claim against the client. There is undoubtedly a distinction between a public corporation such as the city of New York, and a private corporation or individual, where the success or failure of the counsel to succeed in the litigation would have a pecuniary effect upon the client. But we are now considering a general rule. The policy of the law has been to prevent judicial officers and juries from acting in cases where there is such a degree of relationship or interest which could directly or indirectly affect their impartiality. The careful provisions of the Code in relation to judges and other judicial officers show how the Legislature has endeavored to prevent even the suspicion of unfairness; and it certainly would be a great breach of propriety for a judge to take part in the decision of a case in which a valued client, from whom he was receiving large fees for services rendered, was an interested party. Solely upon the ground, therefore, that the relationship that existed between the referee and the city of New York was such that it was improper for him to act as referee in this case, in the absence of express notice of such relationship to all the counsel who joined in the consent to his appointment as referee, we think it is our duty to set aside the report and direct the case to be tried before a new referee. The order appealed from must, therefore, be reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs. VAN BRUNT, P. J., PATTERSON, O'BRIEN and MCLAUGHLIN, JJ., concurred. Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs. 31 278 a164a536 FIRST DEPARTMENT, JUNE TERM, 1898. [Vol. 31. CHARLOTTE D. OTTо, Respondent, v. CHARLES VAN RIPER and Sureties upon the bond of a general guardian — liability of, for moneys deposited by The sureties upon the bond of a general guardian of an infant who had become insolvent, and had removed from the State of New York and died intestate, leaving no property and no representative of his estate, so that it was impossible to obtain a judicial settlement of the accounts of the guardian, realized from a mortgage executed to them by the guardian by way of indemnity against the obligation assumed by such sureties, a sum of money which they deposited in a trust company to the joint account of the general guardian individually and of the two sureties. This money, by reason of the trust company becoming insolvent, was lost. Held, that the sureties were not entitled to be credited with such moneys in the settlement of their obligations, as sureties for the insolvent guardian, to the infant. Under such circumstances a court of equity has power to determine the liability of the guardian and, in the same action, to enforce the obligation of the sureties upon the bond. APPEAL by the defendants, Charles Van Riper and James S. Bryant, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 26th day of February, 1898, upon the decision of the court rendered after a trial at the New York Special Term. James R. Angel, for the appellants. Omar Powell, for the respondent. INGRAHAM, J.: The action was to recover from the defendants as sureties on a bond given upon the appointment of a general guardian of the plaintiff, then an infant. The complaint alleges the giving of a bond, the receipt by the guardian of the sum of $500, and that the guardian subsequently became insolvent, removed to the State of New Jersey and died there on the 23d day of February, 1896, intestate, leaving no estate or property either in the State of New York or the State of New Jersey; that no representative of his estate had |