author: Dañiels, J.:

text:
    CLARK SMITH, Respondent, v. THE MAYOR, Etc., OF THE CITY OF NEW YORK, Appellant.

      Legal business of city of New York ■— by whom conducted — power of corporation counsel to employ additional counsel — §§ 28, 88, chap. 446,1857 — Proceedings to collect taxes — chap. 280 of 1843.
    It is the duty of the law department of the city of New York to conduct the proceedings for the recovery of the amounts due from delinquent tax-payers, and the corporation counsel is authorized to employ additional counsel to assist him therein.
    Where, in pursuance of section 28, chapter 446, of 1857, a sufficient appropriation has been made to pay for services to be rendered to the city of New York, it seems that the right to recover for such services will not be defeated by the expenditure of such appropriation for other purposes.'
    Section 88, of chapter 446, of 1857, requiring a certificate by the head of the appropriate department, as to the necessity of expenditures for which no contract is required, was enacted to regulate the mode in which work required in public improvements should be contracted for and let, and did not include professional services rendered by counsel employed in collecting the amounts due from delinquent tax-payers.
    The proceedings against delinquent tax-payers, authorized by section 12, of article 11, chapter 230, Laws of 1843, must be commenced within one year after the return of the warrant to be issued by the receiver of taxes for the collection thereof.
    Appeal from a judgment in favor of the plaintiff, entered on a verdict directed by the court.

      D. J. Dean, for the appellant.

      John E. Demlin and Nelson Smith, for the respondent.
   Dañiels, J.:

The recovery in this case was for the value of professional services, performed by Nelson Smith, in the institution and prosecution of proceedings in the Court of Common Bleas of the county of New York, for the collection of taxes upon personal property from delinquent tax-payers. The services were shown to have been performed, and their value was proven to be the sum allowed for them by the verdict which was rendered under the direction of the court. It appeared that Nelson Smith, the plaintiff’s assignor, had been engaged in the performance of services of a similar character before the year 1866. In January of that year, Richard O’Gorman became the corporation counsel of the city, and the assignor was then informed by him that he was not familiar with these cases, and he wished him to go on and take charge of them, and the receiver of taxes to obey his direction about them. Under this employment the services were afterward performed, for which the verdict was recovered, with the approbation and concurrence of the receiver of taxes who continued to send the cases as he had before. By sections 1 and 18 of the revised ordinances of 1866, which were put in evidence on the trial, it was provided that the law department should “have charge of and conduct all the law business of the corporation and of the departments thereof, and all other law business in which the city shall be interested, when so ordered by the corporation,” and the counsel to the corporation was authorized “ to employ additional counsel to aid in the trial or argument of causes or proceedings of importance, in which the city may be a party interested.” The first provision made by this ordinance was no more than a re-enactment by the city, of a previous legislative enactment expressed in the same terms. (Laws of 185T, vol. 1, 882, § 26.) And, under them, all the law business of the corporation and of its departments, was placed in the charge and conduct of the law department. It was other law business in which the city should be interested, and not that of the corporation or of either department, that the law department was only to have the charge and conduct of, when so ordered by the corporation. That in which the city or either department was a party, was wholly and in express terms, placed at 'once and without further action, in the charge and conduct of the law department. And it was that in which the city might be merely interested only, which was rendered subject to the further order of the corporation. This is the plain import of the statute and the ordinance; and it placed all the law business of the city and its departments directly in the charge and conduct of the law department, whose chief officer was the counsel of the corporation, and, as such, the power was explicitly given to him to employ additional counsel in proceedings of importance in which the city might be a party interested. These were proceedings of that nature, even if the applications were made in the name of the receiver of taxes. The power to employ • additional counsel was. not restricted to cases in'which the city should be named as a party, but it extended to cases and proceedings in which it was a party interested. And it certainly was so interested in proceedings taken on behalf of one of its depart-' ments to enforce payment of the taxes due to it. . Under this state of the case, sufficient authority existed for the employment of the plaintiff’s assignor, to render it legal, and binding so far as the counsel of the corporation was a party to it. lie had the right to employ additional counsel to perform the services required by the receiver of taxes, who presided over a part of one of the departments of the city, and who, by his acts, appears to have approved of the employment. It was the law business of one of the' departments, and as such, under the express provision of the ordinance, as the city was interested as a party in it, lawfully confided by the counsel of the corporation to additional counsel. And what transpired between him and the plaintiff’s assignor, was sufficient to create such an employment.

But it is claimed in behalf of the defendant that the employment was in violation of the prohibition contained in section 28 of chapter 446 of the Laws of 1857, which declared that no expense should be incurred by any of the departments, or officers thereof, whether the object of the expenditure shall have been ordered by the common council or not, unless an appropriation shall have been previously made covering such expense. (Yol. 1, Laws of 1857, 884, § 28.) And if the evidence had not shown a sufficient appropriation, the objection would probably have defeated the plaintiff’s case. (Burns v. Mayor, etc., 5 N. Y. S. C., 371.) But the employment commenced, or rather was continued, from the time of the commencement of Mr. O’Gforman’s term of office as corporation counsel, in January, 1866; and $59,522 were shown to have been appropriated and raised for the expenses of his department in that year. As this was apparently one of the first engagements made by the law department, and the amount of the appropriation was not exhausted by the disbursements of 1866, it may be reasonably presumed to have included all the compensation • due to the plaintiff’s assignor for his services in the proceedings carried on by him to enforce payment of delinquent personal taxes. It does not appear how much of the appropriation remained unex-pended at the end of the year 1866, but it does, that it was not all used during that year, and that the residue was paid out in 1867, which was not claimed to have been less than the demand made in this action. If it had been, the fact itself could hardly have been allowed to prevail as a defense, because the right to compensation for services directed under a sufficient appropriation ought not to be defeated by its expenditure for other purposes. Certainly, as the evidence stood upon this subject, there was no such defect in the authority to employ as would disable the plaintiff from maintaining the present action.

It has also been objected that there could be no recovery by the plaintiff, for the reason that a previous legislative enactment provided that no expenditure for work or supplies, involving an amount for which no contract was required, should be made, except the necessity therefor be certified by the head of the appropriate department, and the expenditure be authorized by the common council. (Vol. 1, Laws of 1857, 887.) The section of which this was a part was enacted to regulate the mode in which work required in public improvements should be contracted for and let, and did not include professional services of the nature of those for which compensation was claimed in this suit. The substance of it was, that when contracts were required for the performance of that kind of work, they should either be made, and the work let in pursuance of its provisions, or the necessity for the work should be certified to by the head of the proper department, and the expenditure for it authorized by the common council. For services of the nature of those claimed in this case, different provisions were made. They were, by statute, as well'as ordinance, placed under the charge and conduct of the law department, the head of which was empowered to employ additional counsel, when, as was the case in this instance, the city was a party interested in the proceedings.

The services performed were shown by the evidence of the assignor and another witness, sworn on the plaintiff’s behalf, to be reasonably worth the sums charged for them. That was contradicted by no one; and on this evidence, as far as the plaintiff recovered at all, he was clearly entitled to those sums.' But, to the extent of $232.56, the services were rendered in applications to compel the payment of taxes imposed in 1862 and 1863. All the services were performed in the year 1866, which was more than a year after the persons taxed had been in default for the non-payment of these taxes. The rolls for the taxes were required to be completed and delivered to the receiver of taxes of the city by the fifteenth of September in each year, with warrants for their collection. Persons paying before the first of January were entitled to a reduction, at the rate of seven per cent, from the time of payment to the first of' the succeeding February. And as to such as remained rinpaid on the first of January, the receiver was required, by public notice, to demand payment on or before the fifteenth of February. On those remaining unpaid after that time, a percentage was to be added, and on the first of March notice was to be given to the persons still in default, and by publication, requiring payment to be made to the receiver on or before the first of April. And if they failed to pay by that time, and the taxes continued unpaid to the fifteenth of that month, then, on filing proof of compliance with those requirements, on the part of the receiver, he was empowered to issue a warrant for their collection, returnable within thirty days from the time of its date. • And on its return, which regularly should be made by the middle of May in each year (and it was not shown to have been in either year omitted), the proceedings, by application to the Court Of Common Pleas, for which the plaintiff’s assignor was employed, were allowed to be taken. That could be done when a person taxed for personal property, exceeding $1,000 in value, neglected or refused to pay the tax, if he had no goods or chattels which could be levied upon for payment,' and reason existed for believing bim to have debts, credits, ckoses in action, or other personal property not taxed elsewhere in the State, and not subject to levy under the warrant. (Laws of 1843, 317-320 §§ 1 — 12.) This condition of things could not very well appear until the receiver’s warrant should be returned. But by its proper return and the giving of the requisite notices, sufficient evidence of their existence would be supplied to warrant the application. And that the statute provided might be made within one year afterward. The provision it made was the only authority which existed for the proceeding; and, consequently, the application could not be postponed beyond the statutory time. By providing that it could be made within one year, it in effect prohibited it after that time. The legislature had the right tú limit the time, and they have expressed the law in such terms as to supply clear evidence of the intention to do it. (Dudley v. Mayhew, 3 Comst., 1; Sharp v. Speir, 4 Hill, 76.) And under the limit prescribed,. the time in which the proceedings could be lawfully commenced would not exceed one year after the return of the warrant. If the duties of the officers were performed as the law contemplated they should be, that would be returned by the middle of each month of May, for the taxes of the preceding year. And in the absence of proof to the contrary, the presumption is in favor of the regularity of official action. The time, therefore, in which proceedings could be taken in court to enforce payment of the taxes of 1862, would expire with the middle of May, 1864, and for the taxes of 1863, with the same period in 1865. As to those taxes there should have been no recovery, for the assignor of the plaintiff was not employed specifically to prosecute proceedings for their payment, but simply for the recovery of those taxes upon which they could properly be instituted. The employment was, ■ in its nature, dependent upon the judgment of the person employed. It was to take measures for the collection of unpaid personal taxes remaining subject to the remedy provided by the statute, and did not include those on which it had been lost by lapse of time. He was employed to give his attention to these matters, which necessarily meant such claims as were the proper subject of legal proceedings. And that, in 1866, could only include the unpaid personal taxes of 1864 and 1865. As to the former, they could be proceeded for to the middle of May, 1866, and the latter at any time after that during that year. And to the compensation for those services the recovery should have been limited. At the close of the evidence the court directed a verdict for the value of those services, and also those which had been rendered in the cases where the remedy had been extinguished. The defendant excepted to the direction, and that is sufficient to present the plaintiff’s right to the verdict which was ordered. It was erroneous in the amount, and for that reason, as the services performed were entirely ineffectual, the judgment 'should be reversed and a new trial ordered, with costs to abide the event, unless, within twenty days after notice of this decision, the plaintiff stipulate to deduct from the judgment $232.56, the amount recovered for services performed upon the taxes assessed in 1862 and 1863; and in the case of such a stipulation the judgment, as modified by it, should be affirmed, without costs of this appeal.

Davis, P. J., and Donohue, J., concurred.

Ordered accordingly.


source: Caselaw Access Project

author: DANIELS, J.:

license: Public Domain

text:
    PATRICK BERGEN, Plaintiff, v. THE MAYOR, Etc., OF THE CITY OF NEW YORK, Defendant.

      DisPí'icl Police Oowrt in New Torlc city — janitor of — 'power of police justices to appoint — § 13, chap. 588 of 1873,
    The hoard of police justices has power, under section 13, chapter 538 of 1873, to appoint a janitor of a District Police Oourt in the city of New York.
    MotioN by plaintiff for a new trial, on exceptions taken at the Circuit to the order of the court nonsuiting the plaintiff, and ordered to be heard in the first instance at General Term.
    The plaintiff sued for his salary as janitor of the Pourth District Police Oourt, from June 1, 1874, to January 31, 1875.

      Nelson J. Waterbury, for the plaintiff.

      D. J. Dean, for tbe defendant.
   DANIELS, J.:

The plaintiff claimed to recover his salary, as janitor of the Fourth District Police Court, for services rendered between May, 1874, and January, 1875. It appeared that he was appointed janitor of the First District Police Court, on the 11th day of December, 1873, at a meeting of the board of police justices, and, on the 27th of January, 1874, he was transferred from that court to the Fourth District Police Court at a meeting of the board held on that day. It was objected by the defendant, and the court so held, that the board of police justices had no authority to make the appointment or transfer, and for that reason the plaintiff’s complaint was dismissed. In support of the position taken, it was maintained that the power to appoint the janitor was possessed by the commissioner of public works, because the law gave him the care of the public buildings. The duties of the janitor were to sweep and clean the rooms used for the purposes of the court, take care of the books, lock them up, carry messages, and attend to all the directions of the justices and clerks. They were not incidental to the care of the buildings, but essential to the cleanliness, security and convenience of the court rooms. The necessity for their performance was created by the existence and sessions of the court and the proper transmission of its orders and directions. The entire services required to be performed were incidental to the court, and not to the mere1 care of the building in which it was held. Without its occupancy a janitor would be needless, but with its use as a court, he would become one of its necessary attendants, and that seeifis to have been the view entertained of the employment by Judge Folgeb, who delivered the opinion of the Court of Appeals in the case of Sullivan v. The Mayor, etc. (47 How., 491). As an attendant of the court, the board of police justices were empowered to make the appointment. For, before they acted in the first instance upon the appointment of the plaintiff, it was enacted that “the majority of the members attending any regular meeting of the board, may appoint clerks, assistants, interpreters, stenographers, and other necessary attendants, and may remove the same.” (Laws of 1873, chap. 538, § 12.) The janitor was clearly included within the clause providing that the board could appoint necessary attendants beyond those specifically named. The object of the section seems to have been to invest the board with the power to appoint the officers of the court and' such other attendants as were necessary for the proper performance of its functions, and a janitor was one of such attendants. If the board had the power to make the appointment, no objection has been taken to the manner in which it was exercised, and none probably could be. For the transfer which was made of -the plaintiff from the First to the Fourth District Police Court, was simply equivalent to a removal from the former, and an appointment to the latter, position.

The fact that an appointee to the same employment by the commissioner of public works was permitted to recover the salary from the defendant, cannot affect the plaintiff’s right to compensation. He was not a party to that action, and could not be prejudiced by the judgment.

The evidence showed that the plaintiff and his assistant, - at all times performed the duties of janitor at the Fourth District Police Court, and that, added to' the circumstances of a lawful appointment, entitled him to recover the compensation claimed by him.

The order dismissing the plaintiff’s complaint should be set aside, and a new trial directed, with costs to abide .the event.

Davis, P. J., and Lawrenoe J., concurred.

Ordered accordingly.


text:
    ANONYMOUS, Trustee, etc., Respondent, v. FREDERICK GELPCKE and others, Appellants.

      Assignment for benefit of creditors — right of trustee to compromise claims — effect of order of court approving such compromise — notice to parties interested — Trustees must act together.

    A trustee, under an assignment made for tlie benefit of creditors, 'without notice to the creditors or to his co-trustee, who he knew was opposed to the compromise of a claim, applied to the court, by a petition purporting to be made on behalf of himself and his co-trustee, for instruction tb make such compromise, and obtained an order directing it. Held, on application for the passing of his accounts, that such order was no protection for the compromise made thereunder by such trustee. That when controverted rights or doubtful acts are to be determined, notice should always be given to the parties interested.

      Under an assignment made for tie benefit of creditors, the trustee is authorized to compromise claims when it is for the best interest of the parties in interest that it should be done, though such power is not specifically given by the instrument of assignment; and in such case an order of the court approving such compromise, is simply evidence of good faith and care on the part of the trustee in the execution of his trust.
    As a general rule trustees cannot act separately, but must all join in any sale, lease, or other disposition of the trust property.
    Appeal from an interlocutory order, confirming a referee’s report and directing judgment in favor of tbe plaintiff, in an action brought for the settlement of his accounts as trustee, under a general assignment made for the benefit of creditors.

      B. RoeTker, for the appellants.
    A receiver, as an officer of the court, has a right to apply to the court for instructions in relation to the funds, when the question is as to what may be his duty under its orders. {Gurtiss v. Lemitt, 1 Abb. Pr., 274; see Edwards on Receivers, 158; Irelmid v. Eade, 7 Beav., 55; S. 0., 13 L. J. [N. S.], [Oh.], 129; 8 How. [U. S.], 495 ; 2 Hill, 159.) No court or officer can acquire jurisdiction by the mere assertion of it, or by falsely alleging the evidence of facts on which jurisdiction depends. (Judge BboNsoN in The People v. Oassels, 5 Hill, 165.) Courts have only the power and the duty to enforce a trust, if valid, and not to alter or defeat it. {Nicholson v. Leavitt, 6 N. Y., 520; overruling the case of Rogers v. Be Forest, 7 Paige, 272; Pitcher v. Garter,'4 Sandf. Oh., lb-, Fitzgerald v. Topping, 48 N. Y., 444; Jesup v. Hulse, 21 id;, 171, SeldeN, J.; 1 R. S., 680 [730], pt. 2, chap. 1, art. 2, tit. 2 \ In the Matter of Van Schoonhoven, 5 Paige, 560.) The seventy-first section merely authorizes the court to appoint a new trustee in the place of one who is removed by the court, or whose resignation is accepted after he has once, assumed the trust. {Hawley v. Ross, 7 Paige, 107.) “ Section 71. The chancellor shall have full power to appoint a new trustee in place of a trustee resigned or renounced, and when, in consequence of such resignation or removal, there shall be no acting trustee, the court, in its discretion, may appoint new trustees, or cause the trust to be executed by one of its officers.” {King y. Donnelly, 5 Paige, 47.) “This act (4 Edm. Stat., 484, as amended, 7 id., 194, 654) requires no new right or remedy, but it is designed to regulate an existing right merely.” (Juliand v. Pathbone, 39 N. Y., 372.) An assignee under a voluntary assignment for tbe benefit of creditors, is chargeable with the care, and diligence of a provident owner, and liable for a loss occasioned by ordinary negligence. {Litchfield v. White, 7 N. Y., 438.) Trustees of a creditor’s deed, or under an assignment, have no power to compromise debts respecting the estate without an express authority, which must be either contained in the deed or conferred upon them at a meeting of the creditors. (Hill on Trustees, 344, and note 2; Nicholson v. Leavitt, 6 N. Y., 519.) There is also, a difference between “ compromising ” and “ compounding.” (See Burrill’s Law Dictionary; Dow v. Platner, 16 N. Y., 562; Wiles v. Gresham, 2 Drewry, 258; 5 De Gex, MacNaughton & Gordon, 770.) Advice of counsel will not protect a trustee in making a wrong payment, or doing any thing that is not in accordance with his duty as trustee. {Doyle v. Blake, 2 Sch. & Lef., 243; Peers v. Oeel/y, 15 Beav., 209; Hoch r. Walker, 3 M. & C., 705 ; Boulton v. Beard, 3 De G., M. & G., 603; Lie KnigMs Trusts, 27 Beav., 49 ; Ln re Alexander, 13 Irish Oh.) And where trustees compounded with a bankrupt debtor to the trust estate, they were held liable to make good the full amount of the debt, where it was not shown that the bankrupt would have obtained his certificate, or that the debt might not have been recovered in full. (See Wiles v. Gresham, 5 De Gex, MacNaughton & Gordon; affirming S. C., 2 Drewry’s Ch., 258.) “ The power of trustees over the subject-matter of the trust is equal and undivided. They cannot, like executors, act separately; all must join both in receipts and conveyances.” (HaReis, J., in Pidgley v. Johnson, 11 Barb., 535 ; Hill on Tr., 305, 306 ; Brinck-erhoff v. Wemple, 1 Wend., 470, 474; Wiles v. Gresham, 2 Drewry, 285; 5 De Gex, M. & G., 770; Pisher v. Outhell, 5 East, 491.) In a voluntary assignment for the benefit of creditors, partial payment of a debt by the assignee does not take the ease out of the statute of limitations; the assignee is not the agent of the assignor more than an assignee in bankruptcy. {Picket v. Leonard, 34 N. Y., 175; Pooseweltv. Mark, 6 Johns. Oh., 292; Ex parte Pigby 19 Yes., 463; Thatcher v. Gandee, 3 Keyes, 157.) Trustees must all unite in bringing an action on behalf of the estate, though one has assigned his interest' to the other trustees. Herzfeld, upon leaving for Europe, appointed an attorney by letters of attorney, by which he empowered the attorney to do all those acts which the law allows him to do by attorney. This power to do so is shown by the • cases before cited. (8 Cow., 573, 574; Sinclair v. Jackson; Mwmford v. Murray, 6 Johns. Oh., 1 and 452; Tiff. & Bull, on Trustees, 760, 761.) If the court had no jurisdiction, it had no power to make a record, and the supposed record is not in truth a record. If not a record, it cannot import absolute verity. (Mil-bourne v. Woodward, 5 Johns., 37; Fenton v. Gulick, Trustee, 8' id., 194; Buckle v. Eckhart, 3 Denio, 281.) The order of the court of 18th June, 1869, is void, because the creditors, the cestuis que- trust, were not made parties either actually or constructively. (1 Daniell’s Ch. Pr. [4th ed.], 220, 222; Barb, on Parties in Equity, '439; Story Eq. PL, § 207; Mit. Eq. PL, 175 ; Adams v. St. Leger, 1 Ball & Beatty, 182; Horspool v. Davis, 6 Bosw., 581; Christie v. Derrick, 1 Barb. Ch., 260; Grume v. Bisson, 2 Curtis C. C., 177 ; Story Eq. PL, §§ 81, 83 ; Id., § 236.) Objection to want of parties may be taken at the hearing. When an application to the court is not of course, nor such as can be made ex parte, written notice of such application must be served on opposite party. (Barb. Ch. Pr., 568; Corning v. Baxter, 6 Paige, 178.) In case there is any person who has a right to be heard in opposition to a petition, a copy of it must be served upon him, with notice of time and place of presenting the same. This service must be in the same manner and the same length of time before presenting the petition as a notice of motion is required to be served. (Barb. Ch. Pr., 580; Daniell’s Ch. Pr. [II.], 1587.)

      A. J. Vanderpoel, for the respondents.
    The legal presumption always is, that a trustee has faithfully executed his trust, unless the contrary is fully and satisfactorily evinced. (Burrill on Assignments [2d ed.], 559; McCubbim v. Cromwell, 7 Grill & Johns., 157;) As to the general jurisdiction of the court to direct and instruct the trustees who were its officers. (2 K,. S., 730, § 71; 3 K. S. [5th ed.], 22.) Chancery will assist and protect trustees in the performance ■ of the trusts committed to them whenever they seek the aid and direction of the court as to the establishment, management or execution of them. (Trotter v. Blocker, 6 Porter, 269 ; In Matter Qroton Ins. Go., 3 Barb. Ch., 642; The Matter of the Receiver of the Globe Ins. Go., 6 Paige, 102,103.) Jurisdiction to grant the relief sought being thus shown to exist, the question of notice to the parties in interest is not a jurisdictional one, but one addressed to the discretion of the court, relating only to the orderly and methodical conduct of the proceeding in which the aid or sanction of the court is invoked. (Millbcmk v. Orame [Allen, J.], 25 How. Pr., 193.) An irregularity in doing an act which the court has authority to do does not render the act void; and though in a direct proceeding it may be set aside, it cannot be questioned collaterally. (.Millbank v. Grane, 25 How. Pr., 193, 195 ; People v. Norton, 9 N. Y., 178, 179.) There can be no question of jurisdiction, and it is a quasi jurisdiction in rem, a power over the trust, and is not acquired by the service of process upon the cestui que trust, or other persons interested in the trust fund, or in its preservation. (Per Allen, J., 25 How., 195; Miller v. Beverleys, 4 Hen. & Mun., 415, 422.) The order authorizing the settlement having been granted by the court having jurisdiction, it cannot be attacked in any collateral proceeding. (Fisher v. Hepburn, 48 N. Y., 41; The Chemung Ocmal Bank v. Judson, 8 id., 254, 262, 263.) There is no doubt of the perfect honesty of the settlement, and on the principle on which a court of equity acts in cases of this character, plaintiff cannot be made liable for any loss, even if the order of the court had not authorized the .settlement. (Thomson v. Brown, 4 Johns., 619, 629; Pierson v. Thomson, 1 Edw. Ch., 224, 225.)
   DANIELS, J.:

A general assignment was made, on the 11th of June, 1863, by the firm of Gelpcke, Keutgen & Keichelt, to William Vogel, of all their property, for the benefit of their creditors. The assignee proved unable, for some reason, to give the security required by the provisions of the statute prescribing what it should be, and on an application made for that purpose, the court appointed the plaintiff and the defendant Joseph Herzfeld trustees to execute the trusts created by the assignment. Among the assets assigned, and which passed into the hands of the trustees under their appointment, was a large demand existing against the city of Dubuque, in the State of Iowa. This consisted of bonds and two judgments, amounting, in 1869, to about $278,000. It was claimed by the city authorities that it was unable to pay the debt, and a compromise was proposed at the rate of twenty-five cents on the dollar. The plaintiff, in the name of himself and the other trustee, but without his authority or concurrence, on the 15th of June, 1869, presented a petition to this court at chambers, which, after setting forth the facts relied upon, applied for an order allowing and authorizing them to make such compromise and settlement of the said claims against the said city of Dubuque, upon the payment of twenty-five per cent of the said indebtedness, with interest until the same should be paid. The application was referred to a referee to hear and determine the matters set forth and referred to in the petition, and to make his report upon the same to the court. After a hearing before him, he reported that the plaintiff and Joseph Herzfeld, as trustees and assignees.of the firm of Glelpcke, Keutgen & Reichelt, be authorized and directed to compromise all claiins, and all securities held by them as such trustees, as aforesaid, against the said municipal corporation of the city of Dubuque, in the State of Iowa, at twenty-five per cent of the principal and interest of the said claims and securities, with interest upon the same, and assign said claims of indebtedness to H. L. Stout and L. D. Randall. This report was confirmed by the court, and an order was made that the said plaintiff “and Joseph Herzfeld, assignees and trustees for the benefit of the creditors of Glelpcke, Keutgen & Reichelt, be and they are hereby authorized and directed to settle all the claims held by them against the city of Dubuque, in the State of Iowa, whether in the form of bonds, judgments or otherwise, at the rate of twenty-five per cent of the amount thereof, and to assign and transfer the said claims to H. L. Stout and L. D. Randall.” The residue of the order related to the distribution to be made of the proceeds, and is not important in the disposition of this case. The prayer of the petition, the order of reference, the referee’s report, and the order made upon it by the court, have been set forth at large, in order to show what was applied for, and what the court probably designed to provide for by the order which was finally made.

Upon the hearing of this cause, it appeared that this proceeding was instituted, carried on and completed by the plaintiff, without notice to either of the creditors, or to the other trustee or his attorney who was empowered by him to act for him during his absence from the country. • The compromise and settlement was effected by the plaintiff in the same way without notice to, or the assent of the other trustee or either of the creditors. And it appeared that the other trustee had expressed hjs disapproval of such terms of settlement to the plaintiff, before the proceedings were commenced to obtain for them the sanction of the court. The defendants, appealing, objected to the allowance of that part of the plaintiff’s account which was dependent upon the validity of the settlement, claiming it to have been made without authority, and that the order allowing it was void because of the want of notice of the application for it to the creditors. By the report which the referee made on the final hearing of the case before him, it appears that these objections were disregarded, and these defendants excepted to it for these and other reasons. The court at Special Term, however, overruled the exceptions, confirmed the report, and ordered judgment, conform-ably to its terms, in the plaintiff’s favor, and from the order and direction then made the defendants referred to appealed. No objection whatever has been taken to the hearing of the appeal in this condition of the case, and none need be suggested by the court in its determination. But the points presented for decision may, under these circumstances, be properly considered on their merits.

It has been the common practice for courts of equity to advise and direct trustees as to the discharge of their duties, when that may be so much involved in doubt as to render it necessary; and, when the order may not have the effect of determining controverted rights, notice of the application for it does not seem to have been, and probably would not be, indispensable to its validity. For, in that class of eases, it is at most permissive and advisory, adding or refusing the sanction of the court to the judgment, or convictions of the trustees as to what may be judicious under the circumstances presented for consideration. It is simply evidence of their care and good faith in doing what may be deemed best in the execution of the trusts. That was the nature of the course pursued in Curtis v. Leavitt (1 Abb., 274); and Matter of Croton Ins. Co. (3 Barb. Ch. Rep., 642.) But where controverted rights or doubtful acts are to be determined, that practice would be altogether improper. For it would oppose the fundamental principle which protects parties against the consequences of judicial proceedings of which they may have had no notice. To render -them controlling and obligatory in that class of cases, not only notice, but an opportunity to oppose the application to be made, are both matters of vital necessity. (Stone v. Miller, 62 Barb., 431; People v. Soper, 3 Seld., 428-431.) Consequently, important rights are never judicially determined without securing to the parties to be affected, such a hearing as may afford them complete and ample protection against an erroneous or improper adjudication. And trustees have been required to observe this principle in the applications which they have found it necessary to make for- their guidance in doubtful cases. ' In the case of Christ's Church in Londonderry the petition was presented on notice. (5 N. H., 424.) In Wheeler v. Perry (18 id., 307), the proceeding was by bill. Dimmock v. Bixby (20 Pick., 368), was the same. (See also Freeman v. Cook, 6 Iredell Eq., 373; Burrill on Assignments [2d ed.], 557; 2 Perry on Trusts [2ded.], §§ 476 a, 928.) So far as the practice has been indicated it has usually been by bill of complaint, and where the less formal course by petition has been taken, it has been accompanied with notice to the parties interested in opposing it. And that is required by the principle which protects all parties against condemnation, or prejudice to any of their rights, without the opportunity of first being heard. No good reason exists why trustees should' be exempted from its. control, but, on the contrary, that good faith and caution which have always been required from them, should certainly subject them to its control.

If the order which was made for • the compromising and assignment of the debts which the trustees held against the city of Dubuque, was intended as an adjudication of their right to dispose of them when that was either not created at all or was doubtful under the assignment, then notice of the application for it ought to have been given to the creditors; and the omission of notice would render it entirely inoperative as to them. For that reason they could assail and controvert it collaterally, as they have endeavored to do in this case, and it would constitute no justification or excuse whatever for the disposition made of the debts by the trustees. But although the terms used in the order would appear to countenance that construction, it probably should not be so regarded; for, while the assignment did not expressly create the power to compound or compromise bad debts, it did confer a very general authority for the collection of such as should prove collectible, without in any way declaring what might be done with those that were only partially collectible. The object of it, however, was clearly to turn all the assignors’ debts into money for the payment of what was owing to their creditors. And that, with the general power of collection, would logically appear to be sufficient to justify a compromise of such as it might turn out could not be collected in full. It was a necessary act for turning the estate into cash, and must, therefore, have been contemplated by the assignment. The result to be attained could be accomplished in only one other way, and that was by means of a sale, which was not- specifically provided for the disposition of bad debts. Either, possibly, might be adopted, but that of a compromise was the most consistent with the general power given to collect the debts, and the end and purpose of the assignment could be best promoted by making it.

A passage in Hill upon Trustees (page 344) has been relied upon as authority against the existence of the power- of assignees to compromise debts incapable of collection. But, strictly, it does not warrant that understanding, for it is followed by the statement that if they enter into a compromise without the authority of the creditors, they will be held responsible to them if it should be found to be an improper arrangement. This sufficiently qualifies the preceding language -used by the author, to show that the power does exist in case it shall be properly exercised. And that is the clear effect of the case of Shepherd v. Towgood (1 Turner & Russell [12 Eng. Ch.], 379), upon which the statement of the principle was made by this author. The compromise in that case was of a creditor’s action questioning the conduct of the trustee, and the suit was held, under the circumstances, to be sufficiently supported to require an inquiry into his conduct, and that was accordingly directed. (1 Turner & Bussell [12 Eng. Ch.], 390.) The power to compromise, in a proper case, was not denied, but it was considered to have been improperly made use of in that instance. The case of Blue v. Marshall (3 P. Wms., 381) is a more direct authority in favor of the existence of that power. There the trustee had relinquished a debt, considered uncollectible, in order to induce the voluntary surrender of the possession of a piece of land, and even an inquiry into the propriety of his conduct was denied by the court. In Fanshaw v. Higginson (8 De Gex, M. & G., 827), the payment of a doubtful claim for a legacy was sustained, and the principle was in terms declared, that where trustees do only what appears to be prudent in such cases, they are not to be charged. (8 De Gex, M. & G., 834.) And clearly they should not be, for, under such circumstances, no injury can result to the trust estate by their acts. An emergency is then presented requiring the exercise of judgment, and where what is done is the best that can be for the interests of the trust estate, no reason exists for charging them. (Wiles v. Gresham, 5 De Gex, M. & G., 770; Jevon v. Bush, 1 Vernon, 342.)

They had the authority, although not expressly given them in the assignment, to compromise or compound such debts as could not be wholly collected, provided they acted in good faith, and did that which was best for the the ' creditors under the circumstances. The order made, therefore, conferred no power upon them beyond what they had without it, and it should be, as it very well may be, construed as only sanctioning what the petition stated to be the convictions of the trustees concerning the advisability of a compromise. The petition simply applied for an order allowing and authorizing the settlement, and that is all that the court probably designed to do when it was directed to be entered. It did not control the action of the trustees, but added the judgment of the court to what was stated to be their own as to its propriety.

It has been objected that it was not valid even for that purpose, because one of the trustees was not in reality a party to the application for it. But he was named as a party in the petition for the order, and represented by counsel in the proceedings which were taken, and that is sufficient to deprive the objection of the effect it was relied upon as entitled to. (Brown v. Nichols, 42 N. Y., 26.) But neither the authority which the trustees had under their appointment and the assignment, nor the sanction given to it by tbe order that was made, empowered one of them, without the concurrence of the other, to make the compromise. Their authority was joint, and not several, in its nature. (Tiff. & Bull, on Trusts, etc., 539.) As a general rule trustees cannot act separately, but they must all join in any sale, lease, or other disposition of the trust property.” (Hill on Trustees [3d Am. ed.], 305 ; Perry on Trusts [2d ed.], § 411; Sinclair v. Jackson, 8 Cow., 543.) In that case it was held, by the chancellor, that trustees have no separate interests of their own on which the separate deeds1 can operate; they conjointly represent the interest of the cestui que trust, and, unless authorized to act separately by the instrument creating the trust, they can make no disposition of the trust estate vested in them, otherwise than by their joint deed. (Id., 584; Thatcher v. Candee, 33 How. Pr., 145, decided by the Court of Appeals, also sustains the same position.)

And the.order made by the Special Term, approving and assenting to the compromise relied upon, proceeded upon this principle, for it in terms only authorized the plaintiff and Joseph Herzfeld, the trustees, together to settle the claims held by them against the city of Dubuque. It did not sanction the act of one without the other, but permitted both to act in making the adjustment. In this respect it in no manner interfered with or restrained the power they had under the assignment. But, with the approbation of the court, the use of it was permitted in making the compromise it was proposed to complete. They were not bound to make it, and accordingly could, at any time before it was made, refuse it, on becoming satisfied that better terms could be secured. The observance of the dirty requiring the concurrence of both trustees was important in this case, particularly as one of them was'satisfied that the proposed compromise was improvident. And he was probably right in his convictions, for the debts were unquestionably valid, as they existed against a municipal corporation of near 40,000 inhabitants, owing but about $1,500,000. Indeed, there is not the least probability that the assent of the court could have been obtained for the settlement at all, if the fact had been truly stated in the petition for the order, that one of the trustees was opposed to it. Instead of that, he was represented in it to have approved of the terms offered, and ’ as joining in the application made by tbe petition for tbe order. That was a fraud upon the court, which, in any view that might be taken of the nature of the proceeding, would justly deprive the plaintiff who committed it of all possible protection from the order itself. (State of Michigan v. Phœnix Bk., 33 N. Y., 9; Dobson v. Pearce, 2 Kern., 156; Warner v. Blakeman, 4 Keyes, 487.) But even if he could, by conforming to its direction, have been protected by means of it, he could not in the way he agreed upon and made the compromise. For, instead of acting with the other trustee, he alone accepted the terms of settlement offered, formally surrendered the evidences of the debt and completed the compromise, as far as he could possibly do so by his own individual action, and against the known refusal of his companion to assent to it. It is true that the other trustee was not in the country, but he had left an attorney here, in terms empowered to act for him, which was known to the plaintiff) who never even consulted him upon this subject. But if he had not done that, the absence of the other trustee would not have empowered the plaintiff to act in hostility to his wishes, as he did, in making the agreement for the compromise and afterward performing it. It is impossible, under the salutary doctrine of courts of equity, to concede good faith to such conduct on the part of a trustee. Certainly his acts were wholly without authority. And that was enough to render him liable to the creditors for the injury the trust estate had sustained by means of them. It was urged that they could not question the regularity or validity of his proceedings, and The People v. Norton (5 Seld., 176), was relied upon as authority for that proposition. But that case decided nothing of that kind. It merely held that the surety of a trustee who had obtained possession of a trust estate by what may have been an irregular proceeding, could not shield himself from liability on his bond.by means of the irregularity. No such principiéis involved in the present case, for the creditors appealing have done nothing whatever, rendering it inequitable or improper for them to rely upon the unlawful acts of the plaintiff, as the foundation of a claim that he shall indemnify them against the loss he has imposed upon the estate by their performance. He deprived them of what seems to have been valuable assets held in trust for their benefit, and, as his acts in doing that were unauthorized, they have the right to insist that he shall sustain the loss it may have produced.

The order appealed from should be reversed, the accounting set aside, and a new accounting should be directed, so far as the present appellants are concerned, with costs to abide th'e event.

Davis, P. J., and Bbady, J., concurred.

Ordered accordingly.


author: DANIELs, J.:

text:
    ANN E. WILSON, Respondent, v. DANFORD N. BARNEY, A. H. BARNEY, Appellant, and others.

      Receiver — coV/usive appointment of — when order may he vacated..

    Where the court is satisfied that the appointment of a receiver of the assets of a corporation was made collusively and for the purpose of defrauding the plaintiff in another action brought against the trustees of the' said corporation, to which such receiver is a party, it may make an order in such second action, on notice, vacating the appointment of the said receiver and appointing another in his place.
    Where a court is required to decide whether the evidence before it is sufficient to establish the existence of any fact, and it decides that it is, this adjudication cannot be collaterally questioned because another tribunal may consider the evidence insufficient.
    Appeal from an order made at the Special Term, denying a motion for an injunction.
    This action was commenced and prosecuted in the county of New York, to procure an accounting by the trustees of a joint stock company, known as Wells, Fargo & Co., and for the appointment of a receiver of the undistributed assets in their hands, and such a judgment was recovered on the 7th of February, 1873, under one of the provisions of which, one of the trustees, and a defendant in the action, Ashbel H. Barney, was appointed such receiver. Before the commencement of this suit, another action was commenced in Albany county by John McArdle, as a stockholder of the company, on behalf of himself and other stockholders, for a similar purpose, and to secure redress for certain alleged frauds and breaches of duty on the part of the trustees. That action was tried, and judgment directed in favor of the plaintiff. A motion was then made for a receiver on behalf of the plaintiff tL;*<jin, and in support of the application it was urged that Ashbel H. Barney, who was a defendant in both actions, was not a proper person for receiver, on account of a possible liability on his part, as one of the trustees, and that his appointment was collusive. This motion was heard at the Special Term held in the city of Albany, and it resulted in an order referring it to a referee to name a proper person for the receivership, to take such evidence as might be offered by any person and to report it with his opinion, and also to state whether, in his opinion, the appointment of Ashbel H. Barney was collusive or improper. Notice of this motion was given to the attorneys of the plaintiff, and of the receiver, Ashbel H. Barney. A hearing was had before the referee, and, with the evidence taken, he reported that the- appointment of Ashbel H. Barney, as receiver, was not proper, because, as one of the trustees of the company, he had “ assisted in and consented to an improper and unauthorized disposition of portions of the assets and property ” of the company, “ and had thereby rendered himself liable to an action therefor, by any receiver of such property and assets who might be appointed on behalf of the plaintiff and any other stockholder who had not assented to such improper and unauthorized transfer.” That it would become the duty of any receiver appointed in that action to investigate the transactions of the trustees with reference to the property and assets of the company, and call them to an account if they were found improper or unlawful, and that Ashbel H. Barney would not be a proper person to act as receiver in that event. The referee then recommended the appointment of Abraham V. De Witt, Esq., of Albany. The court, at Special Term, held in the city of Albany, on the 11th of May, 1874, after hearing the parties, made an order appointing Abraham V. De Witt, Esq., receiver of the property and assets of the company, and vacating, setting aside, and revoking the former appointment of Ashbel H. Barney, and dmecting him to deliver up, transfer, and convey unto Abraham Y. De Witt, Esq., as receiver, the books, papers, vouchers, property, assets, books of account and choses in action of the said company, and the proceeds thereof, if any remained in his hands or under his control.

      The defendant Ashbel H. Barney thereafter, on notice to Abraham Y. De Witt, Esq., on the 13th day of March, 1815, applied to the Special Term at chambers, in the city of New York, for an order perpetually restraining Abraham Y. De Witt, Esq., from interfering with him as receiver, or with the assets, or any part thereof, or the books, vouchers, or papers, or any of them relating to the same, and from using or enforcing against him the order, or any part of'it, by which Abraham Y. DeWitt, Esq., was appointed recéiver. This motion the court denied, and from the order denying it the defendant Ashbel JEL Barney appealed.

      Grosv'enor P. Lowrey, for the appellant.

      Nathaniel 0. Moak, for the respondent.
   DANIELs, J.:

It does not appear by the order made at the Special Term in Albany, on what ground the court, on a mere motion in an action pending in that c'ounty, vacated and set aside an order made in another action in the county of New York. But a passage contained in the opinion of the learned justice holding the term, indicates it to have been done because the preceding appointment was considered collusive. That passage is as follows: “ The appointment in the Wilson case is on its face formal and regular; still the circumstances attending it are so suspicious, that I strongly, think it was collusive and friendly to avoid the judgment in this case.” If the eoui't were governed, as it now should be deemed to have been, by that conclusion, then the order made by it had proper legal ground for its support. Eor a collusive or fraudulent proceeding, even though judicial in its nature, cannot be maintained, but it may be assailed and disregarded whenever and wherever it may be legally brought in question. (State of Michigan v. Phœnix Bk., 33 N. Y., 9.) There seems to have been no other proper reason why the court should nullify and disregard the order of another co-ordinate tribunal having the same authority over the subject-matter of the litigation as it had itself. And in deference to its proceedings, as the report of the referee supplied facts supporting that view, it may be assumed that the direction was given because the first order was regarded as collusive. This inference is confirmed by the circumstance that it could not consistently have been placed on any other ground. For if it should have been vacated as simply improvident or erroneous, it was the province of the court making it to determine that point. And that could have been done on the application of the plaintiff in the first action, by which leave might have been secured to make himself, a party to the proceeding for that purpose. (Gould v. Mortimer, 26 How. Pr., 167.)

The evidence upon which the reféree reported the facts found by him may have been slight, so far as it contributed to the conclusion that the order was collusive. But even slight evidence will sustain the adjudication of a competent court, as long as it remains unre-versed. It is sufficient for that purpose that the court is required to decide whether the fact contended for has been established by means of it. And if it decides that it has, the formal adjudication cannot be collaterally questioned because another tribunal may consider the evidence supporting it insufficient for that purpose. A court may err, as it often must, in its conclusions, but under ordinary circumstances that can be no good reason for wholly disregarding its decisions. When jurisdiction of the parties and of the subject-matter has been lawfully and regularly secured, an erroneous determination' will be valid and binding as long as it may be allowed to remain unreversed.

The notice of the motion served gave the court j urisdietion over the parties receiving it. And the evidence which the referee returned with his opinion or statement of facts, so far completed it as to extend it over the subject-matter. And that was sufficient to render the order valid against any proceeding on behalf of the first receiver to enjoin and restrain its operations. (People v. Brennan, 10 S. C. [3 Hun], 666.)

The evidence returned by the referee may not have been legally complete for the purpose of maintaining the decision of the court, that the order first made was collusive. But even if it were not, the course pursued was not the appropriate one for its correction. That should be done by an appeal, on which it could be as fully considered as it was at the Special Term, and not by an effort to restrain and enjoin the proceedings provided for by it, in a collateral manner. If the order had been made which was applied for at chambers, its effect would have been to practically annul the one which had been made by the Special Term at Albany. For no substantial difference exists between an order which vacates another altogether, and one perpetually enjoining its use and enforcement.

It is the practice of courts of justice, in the orderly course of their proceedings, to avoid the unseemly conflicts which that practice would not fail to produce. For that reason an ample remedy by way of appeal has been provided,, which will generally prove sufficient to insure the correction of all orders made upon evidence too slender to sustain them. It is not designed to intimate that such was the state of the evidence before the court that made the order assailed. But if that shall be found to be the case, the error should be corrected by an appeal, and not by a collaterally hostile proceeding, carried on before another tribunal.

The order appealed from was right, and it should be affirmed, with ten dollars costs besides disbursements.

Davis, P. J., and Brady, J., concurred.

Ordered accordingly.


author: DaNiels, J.:

text:
    JOHN STEWARD, Respondent, v. THE PHŒNIX FIRE INSURANCE COMPANY OF BROOKLYN, Appellant.

      Policy of insurance — survey — reference to, in policy — effect of.

    Where a policy of insurance provided, that “ when a policy is made and issued upon a survey and a description of certain property, such a survey and description shall he taken and deemed to be a part and portion of such policy and' warranty on the part of the assured,” and the policy described the property as “known as the Mackford Mills, per survey No. 18,611, filed in the office of the People’s Insurance Company, N. T.: ” held, that such survey was not merely referred to for a description of the property, but constituted the basis of the insurance contract.

      Clinton v. Hope Ins. Co. (45 N. Y., 454) distinguished.
    Appeal by defendant from a judgment entered on the verdict of a jury, in an action brought upon a policy of insurance issued by the defendant to the plaintiff. The question raised on this appeal related to the exclusion by the court of a survey of the insured property.

      Alvin O. Bradley, for the appellant.
    The court erred in excluding the survey. Commonly, all that is done is to transcribe a few. words of the description, such as the kind of building, name of place, sort of business carried on, and then to refer to the survey, as on file at a specified office, by its number. (Le Boy v. Mer-cha/nts’ Insurance Go., 39 N. Y., 90; S. 0., 45 id., 80, G-koveb, J.) The policy refers to the survey filed, as the survey and description of the property insured, and the conditions attached to the policy make this a part thereof, and a warranty of the truth of the statements therein made. (45 N. Y., 82; First National Bank v. North America Ins. Go., 50 id., 47; Ripley v. AEtna Ins. Go., 30 id., 136 ; Ruse v. M. B. L. Ins. Go., 23 id., 516, 519, 520; Burritt v. Saratoga M. F. Ins. Go., 5 Hill, 188; Ega/n v. M. Ins. Go., 5 Denio, 326.) Since the survey was a part of the policy, the plaintiff should not have been allowed, against the defendant’s objection, to read a part of the policy in evidence, without producing the rest. In Bipley v. The Etna Ins. Go. (30 N. Y., 136), the plaintiff introduced the survey.

      Waldo Ilwtchins, for the respondent.
    The survey is not made part of the policy. It is not stated in the policy that it (the policy) is made and issued upon such survey, as by the thirteenth condition of insurance it should have been stated, if the defendants had purposed to rely upon said survey, as a warranty, and to make it a part of the contract of insurance.’ The survey is referred to only •to designate the name of the mills assured, “ and known as the £ Mackford Mills,’ per survey, etc.” If the clause of a policy of insurance be obscure, or if it be capable of two constructions, that must be adopted which is most favorable to the insured. (Hoffman v. AEi/na Ins. Go., 32 N. Y., 413, and cases there cited; Western Ins. Go. v. Qropper, 32 Penn., 350.) There is no evidence that the assured had even knowledge that the survey was in existence, except such information as he had by reason of the reference to it contained in the policy. If the company had, under the eireum-stances of this case, intended that the survey should form a part of the contract, they should have said so, in plain and unequivocal language. Not having ' done so, it cannot now invoke the assistance of this court to avoid the contract, by the inference that the parties intended the survey should form a part of the contract. To do so in this case would be to reverse the rule, that every intendment is to be made against a construction of a contract under which it would operate as a snare. (Glinion v. Hope Ins. Go., 45 N. Y., 454, 462, 463, 464.)
   DaNiels, J.:

The verdict on which the judgment appealed from was entered, was directed by the court for the sum unpaid on a policy of insurance issued by the defendant to the plaintiff on his flouring mill, situated at Mackford, in Marquette county, Wisconsin. It appears that the plaintiff applied for insurance in the People’s Insurance Company of New York, and for that purpose a survey was presented to and filed with that company. It did not issue the insurance applied for, itself, but took $2,000 of the amount and procured a policy for the same amount from the defendant, and another for a like amount from a third company. But all the policies were accepted and received by the plaintiff. That which was issued by0 the defendant contained the statement that it insured the plaintiff “ against loss or damage by fire to the amount of $2,000, on his four-story stone building, thirty by sixty feet, shingle roof, and on fixed and movable machinery therein, occupied as a flouring mill, situated at Mackford, Marquette county, Wisconsin, and known as the Mackford Mills, per survey No. 18,611,.filed in the office of the People’s Insurance Company, New York.” By the thirteenth condition of insurance attached to the policy, it was declared that, when a policy is made and issued upon a survey and a description of certain property, such a survey and description shall be taken and deemed to be a part and portion of such policy and warranty on the part of the assured.” And the policy contained the clause that it was made and accepted in reference to the terms and conditions hereto annexed, which are to be used and resorted to in order to explain the rights and obligations of the parties hereto, in-all cases not herein otherwise specially provided for.”

The survey referred to in'the policy was produced upon the trial, and the defendant’s counsel proposed to prove that it was taken by a person connected with the People’s Insurance Company of New York, and by him shown to the secretary of the defendant, who was requested to issue a policy upon it, and that, pursuant to that request, the policy was made out and issued, and that it was done on that survey only. It was conceded that it was not expected to connect the plaintiff with the statement, and thereupon the court rejected the evidence, and the defendant’s counsel excepted. The survey referred to in the policy was then offered in evidence by the defendant’s counsel, and excluded by the court, and to the decision so made the defendant’s counsel excepted. The survey seems to have been excluded upon the construction that the reference was made to it in the policy, only for the purpose of securing a definite description of the property insured. But as the preceding part of the policy contained a complete description of the property before any reference to the survey was made, that construction cannot be sustained. The clause in the policy required a broader construction in order to secure the effect for it which the ordinary import of the words made use of indicated to be intended by it, and that was, that the defendant insured the plaintiff against loss by fire to fhe property described, per survey No. 18,611, filed in the office of the People’s Insurance Company, New York; not merely that it was as described in that survey, but that the insurance was based upon it, and that construction is confirmed by the condition referred :to which made the survey a part of the policy and a warranty of the truth of its statements. The case in this respect does not appear to be capable of any substantial distinction from that of Le Roy v. Market Ins. Co. (39 N. Y., 90), where it was held that a similar reference and condition rendered the survey a part of the policy. And that principle was reaffirmed, in the same case, on another occasion, by the same court. (45 N. Y., 80; see, also, Ripley v. Ætna Ins. Co., 30 id., 136.)

The case of Clinton v. Hope Insurance Company (45 N. Y., 454) is relied upon, in favor of the plaintiff, as an authority establishing a different principle. But it does not conflict with the other cases referred to upon this subject; for, although, the policy which was there under consideration mentioned the survey of the property as being on file in the office of its agent at Utica, the condition, declaring the survey to be a part of the policy, described the one it referred to as being on 'file in the office of the company, and that was at Providence, in Rhode Island. No survey was on file in that office, and consequently none was made a part of the policy. The present case affords no such avenue for escape from the construction already indicated. The policy and its conditions form but one instrument or contract, and by it the intention was clearly shown that the survey on file in the office of the People’s Insurance Company should -form a portion of the agreement made for the insurance of the plaintiff’s property, and that was entirely consistent with his object and design in making the survey itself; for, apparently, it was supplied and furnished as a basis of insurance to the amount of $6,000, and it was used to accomplish that object, not precisely as it was' expected to be, by a policy for the entire amount from the People’s Insurance Company, but by three, aggregating that amount, issued on .the faith .of the state, ments contained in the survey. And by the acceptance of the policies, the plaintiff ratified the departure so made from the original plan of insurance.

It was error to exclude the evidence and survey offered by the defendant, and for that the judgment should be reversed and a new trial ordered, with costs to abide the event.

Davis, P. J., and LawbeNOE, J., concurred.

Judgment reversed and new trial ordered, costs to abide event.


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    LUCAS H. WEETJEN and others, Appellants, v. CHAUNCEY VIBBARD and others, Respondents.

      Trustee — duty of — Misfeasance of ti'ustee — when benejlcicmes can maintain action for, in their own name.

    It is the positive duty of each trustee to protect the trust estate from any misfeasance on the part of his co-trustees, and to institute such proceedings as shall prevent it.
    It is only in case of his refusal so to do, or his connivance in the fraud, that the beneficiaries of the trust can maintain the necessary action in their own name, for the protection of their violated interests.

      Appeal from an order sustaining a demurrer to the plaintiffs’ complaint.
    This action was brought by the plaintiffs, both in their own behalf and also in behalf of all other holders of the bonds of the first division of the St. Paul and Pacific Railroad Company, for an injunction and an accounting by certain trustees. The complaint alleged, among other things, the appointment of three trustees for the negotiation and sale of certain railroad bonds, and that two of them had grossly violated their duty; but it was not alleged that the third trustee had been guilty of any improper conduct, or that he had any knowledge of the misconduct of his co-trustees.

      Joseph H. Choate, for the appellants.

      Thos. H. Hubbard, for the respondents.
   DaNiels, J.:

The present action was before this court at the preceding term, on appeals taken from injunction orders. In disposing of the case at that time, the injunction orders were continued in a modified form, because it appeared from the affidavits and papers then before the court, that the plaintiffs, as bondholders, suing in their own behalf and that of all others having similar ground of complaint, would probably be able to maintain their right to at least a part of the relief applied' for by them. But upon the present appeal, the complaint and demurrer to it are alone presented for consideration. The affidavits in the case on the other occasion cannot, therefore, be resorted to for the purpose of aiding and extending the plaintiffs’ ease by means of the additional facts which could fairly be inferred from what -was contained in them. By their assistance, sufficient then appeared to justify the presumption that the misconduct of Moorhead, the acting trustee, was concurred in and approved of by the other two trustees, in the mortgage given to secure the bonds held by the plaintiffs and the other parties they proposed to represent; and that was then deemed sufficient for the purpose of enabling the plaintiffs to maintain the action for their own equitable protection. But the case now stands alone upon the facts set forth in the complaint, which wholly fails to show any misconduct whatever in the management of the affairs of the trust by Horace Thompson, one of the three trustees to whom the mortgage was given for the security and protection of the bondholders. It is not even alleged that he knew of the misconduct complained of as the foundation of the action, and no facts are set forth from- which such knowledge can reasonably be presumed. If there had been, that possibly might have been sufficient to make him a party to, and responsible for, the misconduct alleged on the part of Moorhead. For, if he knew that the latter was misapplying and diverting from its proper use, under the terms of the agreement made, and the mortgage-given, the iron purchased for the construction of the railroad, that rendered it his duty to interfere and arrest the consummation of the fraudulent design, and a failure to perform it would justify the conclusion that he at least acquiesced in the breach of trust designed to be perpetrated. It is a positive duty of each trustee to protect the trust estate from every misfeasance on the part of the others acting with him; and when it comes to his knowledge that they intend to abuse their trust, by a misuse of the property committed to the charge of all, it is his duty to institute such proceedings as may be attended with the effect of preventing it. And when the act has been performed, he should promptly take all necessary measures to secure the restoration of the fund or property misappropriated, to the proper objects of the trust. A mere refusal to do that will so far involve him in the consequences of his associates’ breach of duty as to entitle the beneficiaries to maintain the necessary action in their own name for the protection of their violated interests. Active participation even in the wrong is not required, to make a trustee a party to it, but silent connivance will be sufficient for the purpose, when it may be observed to afford the means of rendering the misconduct of the others successful. (Powlet v. Herbert, 1 Ves. Jr., 296; Walker v. Symonds, 3 Swanst., 1, 71; Hanbury v. Kirkland, 3 Simons, 265; Mumford v. Murray, 6 Johns. Ch., 1; Hill on Trustees [3d Am. ed.], 309 and note; Boardman v. Mosman, 1 Brown C. C., 68; Brice v. Stokes, 11 Ves. Jr., 319; Oliver v. Court, 8 Price Exchq., 127, 166; Burrill on Assignments, 562, 563; Tiff. & Bullard on Trusts, 568, 669.) And "such misconduct, with a positive misappropriation of the trust property by tbe other trustees, would probably prove sufficient to enable the beneficiaries to maintain an action in equity for their own protection. For, in a case of that description, the trustees could not, with any safety, be relied upon as proper agents to prosecute proceedings for the redress of their own wrongs. In such an emergency, the beneficiaries have the right to avail themselves of the ordinary remedies of courts of equity for their own redress. But where that is not shown, or the trustees have not refused to institute the proper proceedings, the case is not one for their active interposition. (Western R. R. Co. v. Nolan, 48 N. Y., 513, and authorities referred to in the opinion already delivered in this case; Sandford v. Jodull, 2 Smale & Gift.,176.)

The conduct of Thompson has not been implicated in either respect by any thing alleged in the plaintiffs’ complaint, and'while that continues to be the case, he cannot, when nothing else is before the court for consideration, be held to be involved in the consequences of the misconduct of Moorhead. On the contrary, the presumption must be that he has participated in nothing inconsistent with his duty as one of the trustees under the" mortgage. And while he appears to sustain that relation to the plaintiffs, he is the proper person to institute and carry on the proceedings required for their protection. That he has the power to do that is abundantly settled by authority. (Parker v. Ledger, 4 De Gex & Smale 137; Horsley v. Fawcett, 11 Beavan, 565; Hughes v. Key, 20 id., 395; Baynard v. Woolley, id., 583; Budgett v. Haines, 1 Coll., 72; Wood v. Brown, 34 N. Y., 337; McGregor v. McGregor, 35 id., 218; May v. Selby, 20 Eng. Ch., 235.) And in such an action, the persons beneficially interested are not proper or necessary parties. (Franco v. Franco, 3 Ves. Jr., 75.) For all the purposes of the case they are represented by the trustee acting in their behalf, and when he has not been implicated in the wrong intended to be redressed, he is the person who should take proceedings for its correction, and until his refusal to do so is shown in the case, an action by the beneficiaries must be regarded as premature. They are permitted to maintain the action only when that may be the necessary way of protecting their interests, and no such necessity can exist when the conduct of one of the trustees is free from objection and he has not declined to prosecute in their behalf. ® ■

The complaint presents a good equitable cause of action, but not in favor of the plaintiffs as long as one of the trustees must be considered free from even connivance with those by whose breach of trust it has been created, and he has not declined to proceed against them. He is the proper person to maintain the suit, unless it can be shown by an amendment of the complaint, either that he has refused to do so, or made himself a party to the misappropriation of the property equitably bound by the mortgage for the security of the bondholders.

The order should be affirmed, with liberty to the plaintiffs to amend on the usual terms.

Davis, P. J., and Westbeook., J., concurred.

Order affirmed, with leave to plaintiffs to amend within twenty days, on payment of costs of demurrer and appeal.

       See 4 Hun, 529. — [Rep.


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    HORACE B. CLAFLIN and others, Appellants, v. LEWIS S. LENHEIM, Respondent.

      Principal and agent— duty of third person to inquire as to agent's authority — when agency inferred •— how its extent and existence to be determined.

    A carried on business at Great Bend, in Pennsylvania, and had a store at Meadviile, carried on in iris name by bis brother, who had purchased goods from plaintiffs on the credit and in the name of A, and with his authority. The store at Mead-ville was destroyed by fire, and thereafter no act was done by A showing that his brother had power to act as his agent, and the agency was in fact revoked.' The brother, some time after the fire, purchased goods from plaintiffs for a new store at Meadviile, and it was for the recovery of the price of these goods that the suit was brought. Meld, that it was properly left to the jury to determine whether, upon the facts shown, the plaintiffs were not in good faith bound to inquire into the authority of the brother to bind A.
    When an agency is to be inferred from the conduct of the principal, that conduct furnishes the evidence of its extent as well as of its existence.
    Appeal from a judgment entered on a verdict in favor of defendant, and from an order denying a motion for a new trial, made upon the minutes of the justice presiding at the Circuit.

      A. J. Vwnderpoel, for the appellants.
    There were no facts or circumstances proved from which noticé to the plaintiffs of the revocation of the agent’s authority could be legally inferred, and the learned judge erred in submitting such questions to the jury as decisive in the case, independent of proof of actual notice of such ' revocation. If the principal countermand the. authority of the agent, such countermand will' not take effect as to third persons until it is made known to them. {Hazard v. Treadwell, 1 Str., 506; Anon. v. Harrison, 12 Mod., 346; Salte v. Field, 5 T. B.., 215; Morgan v. Stell, 5 Binney, 305; Truema/n v. lodu, 11 A. & E., 589; Lamothe v. St. Louis M. R. and L). Go., 17 Miss., 204; Beard v. Kwk, 11 N. H., 398; Pars, on Con. [5th ed.], 70, 71.) Lapse' of time is not notice in the absence of other circumstances. (Morgan v. Stell, 5.Binney, 305 ; Anon. v. Harrison, 12 Mod., 346, Holt, Ch. J.) The application of the rule of constructive notice to the facts of this case, as shown to have been known to the plaintiffs, which was to result in their being cheated out of their goods, we submit cannot be justified. If mere want of caution, as distinguished from gross and culpable negligence, is all that can be imputed to a man, the doctrine of constructive notice will not apply. (Kerr on Fraud and Mistake, 238; Jones v. Smith, 1 Hare, 55 ; West v. Reid, 2 id., 249-259; Ware v. Lord Egmont, 4 D. G., M. & G., 460.) The question is not whether a man had the means of obtaining, and might by prudent caution have obtained, the knowledge in question, but whether the not obtaining it was an act of gross and culpable negligence. (Kerr, 239; Wilson v. Small, 6 Wall., 83 ; Woodworth v, Paige, 5 Ohio State, 70; Briggs v. Taylor, 28 o Yt., 180; Seyhell v. Hat. Our. Bank, 54 N. Y., 288.) The same reason which has applied this rule to negotiable securities, would apply it to cases like the one at bar. The learned judge erred in submitting to the jury either of the questions submitted to them with the instruction that their finding either affirmatively was decisive in the ease. (Birdsdll v. Russell, 29 N. Y., 220, 249; Wit-Uamson v. Brown, 15 id., 354; Welch v. Sage, 47 id., 143.) There was no evidence upon which the jury would be authorized to find fraud or bad faith on the part of the plaintiffs, and, as this was necessary to justify the inference of notice, it should not have been left to the jury. (ITelch v. Sage, 47 N. Y., 143, at page 147, and cases cited.)

      F. J. ffithian, for the respondent.
    On an appeal from a judgment entered on the verdict of a jury, the facts cannot be reviewed, and an exception to the ruling, by which, a motion for a new trial is denied, presents no question of law, if there is any evidence to support the verdict. (Code, §§ 268, 318.) No question of fact was taken from the jury, but every fact was submitted on the evidence, the admissions and the assumptions of the parties upon the trial. No exception was taken to the assumption of facts stated by the judge, and no question as to the correctness of his assumptions can be raised here. (Beekman v. Bond, 19 Wend., 114; People v. Oooh, 1 Seld., 67; Hoffman v. BEtina Fire Insurance Go., 19 Abb., 325; affirmed, 32 N. Y., 105.) The two litigated questions were presented and submitted separately and accurately, and no question can be raised that the jury did not understand the purport of the charge on either question. Good faith is the basis of the rule which enables a dealer to recover of a man for a credit given to a former agent whose authority has been revoked, or of the members of a firm for a credit given after dissolution. And when the circumstances are such as to put a prudent man, acting in good faith, on inquiry, and he neglects to make the inquiry, he does not act in good faith ; and although he has received no express notice, he is chargeable with such notice as the inquiry would divulge. The circumstances are constructive notice. Whether the notice, express or constructive, is sufficient, is generally a mixed question of law and fact to be submitted to the jury under instructions from the court; and if the evidence and every inference that can be drawn from it tend to establish the fact claimed, there can be no error in the submission of the question. The rule in regard to notice is substantially the same in cases of partnership and cases of agency. (Story on Agency, §§170, 471, 172, 173; Story on. Bail., §208; Dunlap’s Paley on Agency, 163, note 3; Story on Part., §§ 128, 129, 130,160, 161, 335; 3 Kent’s Com., 67; 2 Greenleaf’s Ev., § 68 a.)

   DANIELS, J.:

The claim for the recovery of which this action was brought, was for the price of goods sold and delivered by the plaintiffs, on the defendant’s credit, in November and' December, 1869. Before July, 1867, the defendant carried on business at Great JBend, in Pennsylvania, where he resided, and at the same time he had a store at Meadville, in the same State, which was carried on in his name by his brother, H. S. Lenheim. The goods previously bought from the plaintiffs for this store bad been purchased by this brother in the name and on the credit of the defendant, and with his anthority. In July, 1867, the store 'at Meadville was burned, but between $3,000 and $4,000 worth of the goods in it were saved. At that time there was owing to the plaintiffs for goods sold and delivered for that store the sum of about $8,000. Soon after the fire, and during the month in which it happened, William P. Dunn, who, at the time when the goods in controversy were sold, was connected with the plaintiffs in business, went for them to Meadville to collect the amount unpaid'to them. His evidence upon the trial was, that when he arrived at that place he found the store building had been burned and some portion of the goods, and that “ there was not any store running.” He then went to Great Bend, where he met the defendant, who conceded his liability for the amount then unpaid and promised to pay it. Soon afterward attachments were issued against his property in New York for the recovery of the unpaid balance, and in a short time subsequent to that it was partially paid, and the residue satisfactorily adjusted and ultimately satisfied. No further sales were made for either of the stores at Meadville or Great Bend by the plaintiffs, until October, 1869, when a case of prints was sold for cash to the defendant himself for the store at Great Bend. In the following months of November and December, the goods were sold on the order of the defendant’s brother for a store at Meadville, for the price of which the plaintiffs claim to recover in this action. It did not appear thac 'he had in any way held his brother out as his agent, or as having any authority whatever to act for or bind him, after the destruction of the Meadville store by fire, or that he had been in any manner employed by him from that time. But it was shown by the defendant’s own evidence as a witness, which was not in any manner controverted at the trial, that he revoked his brother’s authority as soon as he had ascertained the state in which his affairs at Mead-ville was left by the fire.

The court at the trial left- it to the jury to determine, whether upon the facts shown, the plaintiffs were not in good faith bound to inquire into the authority of H. S. Lenheim to bind the defendant by further purchases in his name before they sold the goods in controversy. And on _ that point they must now be deemed to have found in the defendant’s favor. The plaintiff's excepted to the submission of the question to the jury, as one on the determination of which the rights of the parties depended. It was not insisted that the question was not a proper one for their consideration, or that it should be decided by the court as matter of law; but the exception was to the direction that they should find for the defendant, if, in a fair dealing, the plaintiffs should have inquired whether the brother continued to have authority to buy goods in his name, or whether the business was continued by him. The proposition, in brief, was, that they should find for the defendant if the facts proved imposed the duty upon -the plaintiffs to inquire concerning the continuation of the authority before they made any further sales. And to that the plaintiffs must be understood as intending to present their exceptions. In support of them, it was urged upon the argument that the mere knowledge of facts sufficient to indicate the necessity of inquiring whether the authority had not been terminated before the agent could be further safely trusted, was not enough to protect the principal from liability for the debt created without making it. And the authorities holding that the right to recover upon commercial paper cannot be defeated by circumstances of that nature, are relied upon as supporting this position. But that effect cannot properly be attributed to them. For they simply-establish an exception in favor of the holder of such paper who has parted with value on the faith of the apparent unqualified right of the possessor to dispose of it. And it was created to promote the security of persons dealing in that1 kind of paper, having, in the uses to which it has been long devoted, some of the valuable characteristics of currency. It resulted from a long contest, attended with great uncertainty for a time, but finally ending in the conclusion now generally sustained, by which the title to commercial paper can only be impeached when it .has been acquired for value from an apparent owner, by showing bad faith on the part of the person receiving it. ( Welch v. Sage, 47 N. Y., 143; Goodman v. Simonds, 20 How. [U. S.], 343.) But even such a purchaser “ must not willfully shut his eyes to the means of knowledge which he knows are at hand, for the reason that such conduct is equivalent to notice, and is plenary evidence of bad faith.” (Merchants' Bank v. State Bank, 10 Wall., 604, 670, 671.) A different rule, not so stringent in its terms, has been very commonly applied to other transactions. That was clearly expressed by Baron AldbesoN, in deciding the case of Whitbread v. Boulnois (1 Tounge & Coll. [Ex.], 303, 328), in the following terms: “ When a party, having knowledge of such facts as would lead any honest man using ordinary caution to make further inquiries, does not make, but on the contrary studiously avoids making such obvious inquiries, he must be taken to have notice of those facts, which, if he had used such ordinary diligence, he would readily have ascertained.” And its propriety and justice were fully maintained in the decision of Williamson v. Brown (15 N. Y., 354). This rule has been applied to protect retiring partners from liability for debts contracted to persons previously dealing with the firms of which they had been members. In Barfoot v. Goodall (3 Camp., 147), the omission of the name of Foster in the checks supplied by a banking firm to its customers, was held to be sufficient to impose the duty on the person using them to inquire whether he had not left the firm. And in Zollar v. Janvrin (47 N. H., 324), facts which would put the creditor on inquiry, were treated as equivalent to actual notice of a partner’s retirement. Deering v. Flanders (49 N. H., 225); and McIver v. Humble (16 East, 169), also support this conclusion. All that the law requires to protect the retired partner is, that the creditor shall have knowledge of the fact before the debt has been incurred, and that may be as completely obtained from circumstances indicating its existence, as from direct and explicit notice. (Hart v. Alexander, 2 Mees. & Wels., 484; Jeby v. Vining, 2 McCord, 379; Tudor v. White, 27 Texas, 584-586.) And the principle is as applicable to the simple case of an agency as to that of a partnership, which, so far as it lias been controlled and governed by means of it, involved only that of an agency. The power of one to bind another by his acts and contracts, may be as well extinguished by a constructive notice in the case of a mere agency as in the case of a partnership. The reason justifying the application of the rule in one case equally requires it in the other. And it was properly applied to the case now before the court. There was no error in the proposition included in the charge, that the plaintiffs could not recover if the circumstances proved required them, in the exercise of good faith or fair dealing, to inquire whether the power of the agent continued, before they sold him goods on the supposition that he might still be authorized to charge his former principal by means of his purchase.

By the appeal from the order denying the motion for a new trial, the further question is presented, whether the facts proved created the duty to inquire, in order to protect the plaintiffs against the consequences of the revocation of the agent’s authority. Aside from the evidence given by the defendant, there was nothing shown, precisely indicating what had been the powers of the agent, while he was employed in the store at Meadville, beyond the circumstance that he had the superintendence and management of the business then carried on'. By whose act the place for the business was obtained, or what was the condition of the business when it was placed in the agent’s charge, was not made to appear. The fact alone was shown that it was carried on in the defendant’s name, and his brother had the charge of it. The defendant’s evidence gave him no increased authority beyond that which may be implied from these circumstances. His statement was, that his brother “ took the entire charge of the store, the purchase of the goods, and the selling of them ; the store was carried on for his benefit, pretty much.” “ Prior to the fire, I authorized my brother to make purchases and carry on the store in my name.” In this state of their affairs, his authority did not extend to the procurement of another store, and the commencement of the.business anew. It was restricted to what he had been doing, and that was to carry on an existing business, which did not include the power to procure a new store-and transfer the business to it. That was a step exceeding any thing he had either -previously done, or had been employed to do, for the defendant. It was an event not contemplated by or provided for in his employment. To procure a new store and commence business in it, required the act or authority of the defendant. And the previous position. and duties of the agent justified no one in supposing that any such power had ever been given to him. He was in no way held out as possessing it. The rule upon this subject is, that “when the agency is to be inferred from the conduct of the principal, that conduct furnishes the only evidence of its extent as well as of its existence.” And in solving all questions on this subject, the general rule is that the extent of the agent’s authority is, as between the principal and third persons, to be measured by the usual employment of that person. (Cox v. Hoffman, 4 Dev. & Bat., 180, 181; Humphrey v. Hawkins, 12 Minn., 298.)

The event encountered by the destruction of the agent’s place of business, was one which his apparent authority had left entirely unprovided for. The consequence was, that the business passed, by means of it, exclusively into the defendant’s hands. And it was for him, and not for the agent, to say whether it should be continued by the opening of a new store. The work the agent was employed to do was completely suspended, and it could only be extended again by further authority, derived from the principal. The business of the agency ended by the destruction of the store in which it had been carried on. For he was only authorized to carry on that store in the defendant’s name. That appeared from the authority he exercised and the duties he performed, as well as from the statements made by defendant as a witness. When that was destroyed, it extinguished the subject-matter of the agency. For the business could not be continued without either rebuilding, or procuring another store in some other place. And neither was within the province of this agent. And a knowledge of that fact was equivalent to notice that he could no longer bind his principal by further purchases, in the absence of some new grant of authority. (Story on Agency [4th ed.], § 499 ; 2 Kent [7th ed.], 824). This fact did not stand by itself in the present case. It was not only known to the plaintiffs, but, beyond that, they had closed their account with defendant by a suit and an attachment of his property, and afterward did no business with either himself or his brother, for a period of about two years. When the defendant’s brother applied, in November, 1869, for further credit in the defendant’s name, as reasonably prudent persons, they were required, at their peril, to ascertain, before they trusted him, that he had secured authority to render his contracts obligatory on the person whose name he used.

The presumption, from the other circumstances which had become fully known to them, was, that his authority had ended. And the court, at the trial, could have as well held so, as the Court of Appeals did, in the case of Hoppock v. Moses (43 How., 201), where it was decided that the creditor should have known that the power of the agent was extinguished when he entered into a partnership with another- person.

The evidence was entirely sufficient to sustain the ruling of the court, and the verdict of the jury. The judgment and order appealed from should both be affirmed.

BRady, J., concurred.

Judgment and order affirmed.