The second amended complaint in this action, upon which was joined the issue to he determined by the referee, alleged in substance that upon the 26th of October, 1893, the plaintiff signed two written instruments, one purporting to be a bond to Edgar Lock"wood, one of the defendants, as trustee, conditioned for the payment by her of $7,500, and the other a mortgage to secure the bond; that the mortgage was recorded in the office of the register of deeds and appeal’s to be a valid instrument, and creates a cloud on the title of certain premises in the city of New York owned by her. The complaint then contains allegations that each of said instruments was without any consideration ; that at the time of signing them the plaintiff did not know their contents, but believed that they were something else than what they in fact were; that she did not know the legal effect of them, and that her ignorance of the contents of the instruments and their legal effect was caused by false representations made to her with intent to deceive her, and that she believed the representations. The complaint further goes on to state that from the 21st of June, 1893, and until after the signing’.of the papers referred to, the plaintiff was sick and suffering from nervous prostration; that she was taking anaesthetics under a physician’s advice; that she never had any knowledge of legal or business matters, and that she was in such a nervous mental condition as to be unable to control her thoughts or to comprehend the consequences of her acts, and that her mind was'not in a com dition to consent to the terms of the contract. She alleges, also, that before the beginning of the action she demanded of the trustee to whom the instruments were given, to deliver them up, but that *298he refused to do so. The relief she demands is that the instruments be canceled, satisfied and discharged of record.
The answer puts in issue the validity of the bond and-mortgage, and insists, that each of them is a. valid instrument executed by the plaintiff in the full possession of her faculties, with full knowledge of the contents of each, for a valuable consideration, and that they are valid obligations in the hands of the persons to whom they were made and who then'held them. Upon the issue framed by this answer the cause was referred to a referee to' hear and determine. A very considerable amount, of testimony was taken before the referee, and at some time in the course of the trial a stipulation of facts was produced by the defendant’s"counsel and put in eviden.ce. That stipulation contained, in addition to a large number of facts bearing upon the question of the original consideration of the mortgage, the agreement that the second amended complaint, upon which issue had been joined, should be deemed amended so as to contain an allegation to the effect that when the plaintiff signed the alleged bond and mortgage the plaintiff and Edgar Loclc'w.ood (who, as trustee for other persons, was named as the party of the second part in the bond and mortgage) both believed that the firm of Way-dell & Co. were indebted to the persons for whose benefit the bond and.mortgage were given, but that in fact they were not “at the time the said alleged bond and mortgage was signed as aforesaid, nor at any other time,” indebted, in any sum whatever to those persons or any of them in any manner. With this stipulation in the case the parties proceeded to examine fully into the consideration of the bond and mortgage. It appeared that the plaintiffs husband had purchased from the persons for whose benefit this mortgage was given letters of credit to a large amount, and that .the firm of Waydell & Co. liad guaranteed the payment by the plaintiff’s husband of the amounts drawn on these letters of credit. After a large amount had been drawn upon them, the plaintiff’s husband died, leaving his affairs in a very unsettled condition, and Waydell & Co. were in a fair way to be financially ruined because of the ■ necessity of meeting, the claims of the persons who had issued the letters of credit for the money paid on account of them. The plaintiff was the owner of valuable real estate in the city of Sew York in her own right, and to-enable Waydell & Co. to meet the liability *299incurred by their guaranteeing the credit of her husband she executed the bond and mortgage in suit and another one. The allegation that the bond and mortgage were issued without consideration made it necessary of course to ascertain what, if anything, was due upon the letters of credit for which Waydell & Co. were guarantors. The stipulation in question stated many facts bearing upon the amount of indebtedness arising from this letter of credit, and that stipulation, with much other testimony, was given upon the trial, tending to show what, if any, amount was due upon those letters of credit at the time the mortgage was given by the plaintiff, and in the course of that testimony the plaintiff claimed that it appeared that for a large portion of these alleged debts neither, her husband nor the firm of Waydell & Co. were liable, and that in fact, if the amount for which they were not liable was deducted, as she claimed it ought to have been, from the amount apparently due by Waydell & Co., the remainder would be considerably less than the payments which had been actually made upon account of that debt, for which the mortgage was security. After the testimony upon this question of consideration had all been received, and the evidence had been closed, an application was made by the plaintiff to amend the complaint to conform to the facts proved by inserting substantially an allegation: “ That at the time when the plaintiff promised to pay $7,500 to the defendant Edgar Lockwood, the plaintiff and Edgar Lockwood intended that said promise be a promise to pay $7,500, part of any debt which John H. Waydell, Anderson Waydell and Frederic Waydell, a partnership, doing business under the firm name of Waydell & Co., owed the other defendants; and plaintiff further alleges that on November 11th, i893, any debt which said Waydell & Co. owed said other defendants was paid in full, and that the answer to the second amended complaint herein be deemed amended so as to deny each and every of the aforesaid allegations, or in such other form as defendants may be advised.” This was strenuously Opposed by defendants’ counsel, but after a full hearing the learned referee concluded that the amendment was one which he was authorized to make, and allowed it. To this ruling the defendants’ counsel excepted, and the question raised by this exception is the first one that confronts us upon the argument of this appeal.
*300It is claimed on'-the p'avt of the defendants that the amendment not only changes substantially the claim of the plaintiff, but constitutes in fact a new cause of .action, and, therefore, it was’ beyond the- power.of- the referee to permit it tó be inserted in the complaint at the -triah The power of the referee arises from section 723 of the Od'dé "of Civil -Procedure, which provides that the court may upon the trial, -in furtherance of justice, amend any pleading by inserting an allegation material to the case,, or where the amendment does not change substantially the claim or defense," by conforming-the pleading to the", facts proved. A referee to whom a case has-been referred to'hear and determine, has, in this matter, the same power as-a court bef ore which a trial is pending. Both court and referee derive their power purely from the provisions of this section, and while the power-is undoubtedly to be exercised with considerable freedom within its limits, yet its extent is quite strictly limited,, •as will" be noticed by" a reading "of the section, and the referee hastio power to allow any amendment which goes beyond the strict" limitation- of -the statute in that regard. These limitations are that the amendment to be alleged must not change substantially tlie claim or defense. When the power of "the referee to grant such an amend.ment is challenged, it is not necessary for the challenger to show that the améndment operates to set up a new cause of action, hut he makes "out his case to prevent it if he makes it appear that tlieamendment changes ' substantially the claim made by the plaintiff. It -is riot necessary to examine-into the reasons of this limitation of the power of the referee. It is sufficient to say that they are plainly established by the law, "and the only question in any ease is whether the amendment allowed is broader than the statute jsermits.
This action - was brought to procure -a cancellation of the bond and mortgage,- and that it should be discharged of record. The action as "brought proceeded upon tlie theory that the mortgage -was never a valid instrument, but that it was made without- consideration ; that the plaintiff" was in'ocured by fraud to sign- it, at a time when, . because-of-her mental condition, she was peculiarly susceptible to be influenced- by any one in whom she had confidence. The gravamen-of this action is that the mortgage had never any existence as a valid instrument. Whatever may have occurred after the mortgáge had been given was of no importance except , as it bore upon the *301question whether in fact themortgage, when signed by the plaintiff, became valid. The plaintiff was bound to stand or- fall by the proposition that, as a matter of law, the mortgage never took effect as a valid instrument. The amendment which was allowed by the referee was a serious change in the position of the plaintiff. So .far. from insisting that the mortgage was nevér a valid mortgage, this amendment practically conceded its validity and asserted a claim to have it satisfied of record for the reason that, being a valid instrument, its obligations had been satisfied so that- it no longer was operative. The relief which she would have been entitled to under that state of facts was not to have the instrument canceled and vacated, as invalid, but to have put upon the record a statement that the mortgage had been satisfied and discharged. Her right to have that relief arose under this amendment purely and only by what occurred after the mortgage was made. Anything that had been done by way of inducing her to make the mortgage was of no sort of importance as to her rights under the amendment, except, so far as it might bear upon the amount which she could be called upon to pay before she could have the mortgage satisfied. The two rights were entirely different, therefore, and arose out of entirely different conditions, and while, because they both sought substantially the same end they were not necessarily inconsistent in that regard,, yet the end which they sought was to be reached by entirely different roads, over different ground. The two claims proceeded upon inconsistent and contradictory theories. If .the plaintiff had tried the action upon the pleadings as they were framed at the time the .order of reference was made, she would have stood upon the theory that the mortgage was never a valid instrument. If she had been defeated in that action, nothing in the judgment would have operated as a bar to an action to compel the discharge of the mortgage for the reason that it had actually been paid, and she might,.as soon as the first judgment against her had been entered, bring another action for the discharge of the mortgage based upon the facts set up in the amendment. It is quite clear, for this reason, that not only did the amendment, change substantially the claim of the plaintiff, but that it inserted a new cause of action. Therefore, it was beyond the power of the referee to permit the amendment.
But it is said that the evidence was already in without objection, *302and for that reason it was proper that" the complaint should be amended to conform to the facts which each side was willing to put into the case. It is quite probable that if the parties had consented to litigate before the referee the question whether this mortgage had been paid, there would have been no objection, at the close of the case, to his amending the complaint to ■ introduce allegations which each party had permitted to be litigated upon the trial. Bu* that condition of affairs did not exist here. It is quite true that the parties went into the consideration of this mortgage, but it was solely upon the issue tendered by the pleadings,, that the mortgage was executed' originally without consideration. Every particle of testimony which was. admitted upon the question of the amount of the debts was competent and material upon -that question! The defendants could not have successfully interposed .an objection to any of that testimony. They' were not estopped, therefore, from insisting that the testimony which was material upon the issues framed.by the pleadings should not be used’as a reason for requiring them to litigate another question which was not presented in ■ the pleadings, and which clearly was not within their purview at' the time the' action was referred to the referee. -
It is said that the amendment contained in the stipulation, to the effect that Waydell & Co. were not, at the time of the giving of the bond and mortgage, or at any other time, indebted to the bankers, is broad enough to permit the plaintiff to raise the question that the mortgage was afterwards paid. With that contention we do not agree.. The amendment spoken of has in view only the consideration for which the mortgage was' given, a matter already presented by the pleadings and simply amplified by the amendment, and the question of indebtedness in that amendment clearly applied to. such indebtedness as would afford a sufficient consideration.for the mortgage, and nothing further. It does not warrant any claim that the mortgage, having a sufficient consideration, was paid after it had become a valid and' effectual security, because the whole theory of the complaint was that it never took effect as such. We are constrained, therefore, to differ with the learned referee as to the power to allow'the amendment, and as. a result we must reverse, this judgment and order a.new trial before another referee, with costs to the appellants-to abide the event of the action.
*303Van Brunt, P. J., Barrett and Ingraham, JJ., concurred ; McLaughlin, J., dissented.