Olcott v. . Tioga Railroad Company

Selden, J. The referee has found, as a fact, that the draft upon which the first action was brought was executed by the defendant; and that finding includes an affirmation of the authority of Wilson, the president of the company, to make the draft in its behalf. If there was any evidence proper to be considered by the referee, tending to sustain this finding, sufficient to justify the denial of the defendant’s motion to dismiss the-complaint, the'finding cannot be disturbed on appeal to this court. I -think there was not only some evidence to justify the conclusion of the referee, but do not see how he could-have arrived at a different result. .It was within the power of the board of managers to clothe the president with authority to make the purchase of the locomotive, and to give the obligation of the company in payment for it. The language of- the charter is, “ the president and managers shr.il *557 conduct the business of said companyand there is nothing in the charter, or any of its supplements, to restrain this extensive power, so far as relates to the present question. The purchase of locomotives was a part of the legitimate “ business of the companyand it cannot be questioned that the president and managers could appoint an agent with full powers to make such purchases, whether the agent was one of their number or a stranger (Ang. & Ames on Corp., ch. 8, § 1; ch. 9, § 2); and to execute bills or notes of the corporation in payment of debts thus incurred. (Curtis v. Leavitt, 15 N. Y., 9, 66, 67.) “All acts within the powers of a corporation may be performed by agents of its own selection." (Barnes v. Ontario Bank, 19 N. Y., 158.) Mr. Wilson was clearly invested with power to make the bill. He was the president of the company, not only de facto, but de jure. He was properly elected in January,. 1839, and, without any special provision in the charter to that effect, would have held over until another president was elected (Strange, 625; 10 Mod., 146; 9 Johns., 158); and the fourth section of the charter expressly provides, that the officers elected by the stockholders,' among which is the president, “ shall continue in office for one year, and until others are chosen.” He had not removed to Hew York when he made the bill, and it is therefore unnecessary to consider what effect such removal had upon his powers or tenure of office. By virtue of his office, if nothing further appeared in regard to his powers, I think he would not have been authorized to purchase the locomotive, or to execute the bill. Those were duties which belonged to the board of managers, and could only be conferred upon other officers or agents with their consent (McCullough v. Moss, 5 Denio, 575; Hoyt v. Thompson, 1 Sold., 320.) The managers, prior to the 2d of April, 1838, appointed an executive committee, and by a resolution of that date invested the committee, so far as their-act could do it, during the intervals between the meetings of the board, with “ the full powers of the board to act for, and to bind the company.” That committee, in October, 1839, authorized the president to *558 purchase a locomotive and tender, and to give the notes of the company for them; and also “ to act in all the ordinary business of the company as fully as the committee.” might do. It does not appear that these powers were ever recalled; and if neither the board of managers nor the committee were acting beyond the scope of their own authority, the president had the express warrant of the corporation for everything which he did. The managers might, undoubtedly, clothe a committee, in the intervals betweeti the sittings of the board, with all their own authority to conduct the ordinary business of the company (Hoyt v. Thompson's Executor, 19 N. Y., 207-216); but it does not follow that the committee could delegate that power to one of their number. I doubt their authority to do so, as they had no express power of substitution; but it is unnecessary to pass upon that question, as there is another ground on which the power of the president to bind the company must be sustained. The board of managers, designedly, as it must be presumed, relinquished to the president, for a period of three years (embracing the time of all the transactions involved in the present actions), the exclusive management of the business of the corporation; allowing him", at his own discretion, to employ and pay the workmen constructing the road; to purchase and lay the iron constituting the track; to borrow money in large and small sums, giving the notes or bills of the corporation therefor, as well as other securities j to purchase locomotives and cars, and to put them in use on the road, paying for them in like bills and notes; and when, at the end of the three'years, the managers again resumed the discharge of their appropriate duties, they took possession of the road and of all the property thus procured by the president, and continued to use such property for several years, without question as to the manner in which it had been obtained. Under such circumstances, the acts of the assumed agent cannot be repudiated* The powers of the agent of a corporation are such as he is allowed by the directors or managers of the corporation to exercise within the limits of the charter; and the silent acquiescence of the directors or man *559 agers may be as effectual to clothe the agent with power as an express letter of attorney. Judge Story says, in Bank of United States v. Dandridge (12 Wheat., 64): “If officers of a corporation openly exercise a power which presupposes a delegated authority for the purpose, and other corporate acts show that the corporation must have contemplated the legal existence of such .authority, the acts of such officers shall be deemed rightful, and the delegated authority will be presumed.” This doctrine has often been confirmed (Melledge v. The Boston Iron Co., 5 Cush., 175; Bridenbecker v. Lowell, 32 Barb., 18; Perkins v. Washington Ins. Co., 4 Cow., 645, 659, 661; Hoyt v. Thompson's Executor, 19 N. Y., 208, 219; Ang. & Ames on Corp., 3d ed., 269); and, applied to the present case, shows that the authority of Wilson cannot now be denied. But it is insisted that the bill purports on its face to be the bill of Wilson, and not of the defendant, and does not, therefore, bind the defendant. The evidence shows that it was drawn for the debt of the company, by an agent authorized to draw it, and, according to well-settled rules, the company is bound by it, if, upon the whole instrument, it can be collected that- such was the intention. (Story on Agency, § 154; Rathbone v. Budlong, 15 Johns., 1; Many v. Beekman Iron Co., 9 Paige, 189; Safford v. Wyckoff, 1 Hill, 11; S. C, 4 id., 442; Fuller v. Hooper, 3 Gray, 334.) There was clearly sufficient upon the face of the bill to indicate an intention to bind the company. In this respect the case cannot be distinguished from those of Safford v. Wyckoff, and Fuller v. Hooper (supra). The defendant’s counsel' claims that the contract for * building the locomotive was not binding on the company, and that for that reason the president had no right to execute the bill on behalf of the company. Two grounds are relied upon to sustain this position: 1. That the contract was, on its face, the private contract of Wilson and Bostwick; and, 2. That the defendants had no power to make the contract jointly with the Hew York company, and that it could not, therefore, bind them. The first ground is answered by what is said in regard to the bill. The evidence is equally as clear on the face of the *560 contract, as it is on the face of the bill, that it was made for the corporation. In regard to the other ground, I think the companies, if there were nothing special on the subject’in their charters, would have been authorized to make the arrangement which existed between them, for a joint ownership of locomotives to run over both their roads. (4 Seld., 37; 14 Barb., 471; 24 id., 382; 29 id., 56, 57; 6 Gray, 539; Redfield on Railways, pp. 281, 287, §§ 135, 136.) But whether that would be so or not, the supplement to the defendant’s charter, passed in 1835, providing for the connection of their road “ with the Chemung canal by railroad, canal or slackwater navigation,” would justify them in making that arrangement. The defendant’s counsel excepted to rulings of the referee, allowing the president of the company to testify that on various occasions, both before and after the date of the bill in question, he made drafts and promissory notes in the name of the company; that they were honored, and that the amounts entered into the accounts of the company. I think this evidence was admissible. The cases above referred to show that the limits of an agent’s ¿uthority may be determined by the power which he is allowed to exercise, and that silent acquiescence of the principal may be equivalent to express assent. In other words, that the authority may be shown by circumstances. The recognition by a corporation of acts on the part of an agent, similar in character to those which may be in dispute, tends strongly to establish the agent’s authority. (15 Johns., 54; 1 Hill, 501; 4 Seld., 160.) It does not appear that the board of managers had any direct agency in the payment of the bills or notes made by the ■ president, and it is a fair presumption, from the manner .in which all the business was done, that the payments were made by the president, without any communication at the time with the other officers or the managers of the company, and if nothing further appeared, such payments would have been circumstances of no importance; but the subsequent rendering of accounts to the board of managers, containing entries of such payments, unobjected to on the part of the board, affords a strong pre *561 sumption of a ratification of those acts. At all events, such evidence could not be rejected, even if its bearing should be regarded as slight or remote. It is insisted that evidenceof themaking of bills and notes subsequent to the date of the bill in suit, was specially objectionable; but I think the authority to make the bill might be shown by the approval of similar acts after as well as before the bill was drawn. The proof related to a continuous series of acts, embracing the time of the act in contrnversy, and was, all of it, competent as bearing upon the authority to perform that act. The objection goes to the weight and not to the admissibility of the evidence; later acts might be less decisive than prior ones, but evidence of them could not properly be excluded. Exceptions were also taken to testimony showing that the transactions and financial affairs of the company during the presidency of Mr. Wilson, his making of loans, purchasing property and giving negotiable paper for the company, were the subject of conversation at the meeting of the board of managers, in February, 1841. What took place before the board of managers, when engaged in the business of the company, in regard to the doings of the president, was undoubtedly admissible, as notice to the corporation of the powers which its officer was exercising. Notice to the board was notice to the corporation. (19 N. Y., 216.) It is, however, insisted that the evidence excepted to related to conversations with individual members of the board, which would doubtless have been inadmissible; but the case does not admit of that interpretation, especially as it appears that the referee had, before this testimony was offered, refused to hear evidence of such conversations. These are all the objections which are made to the judgment upon the bill of exchange, and I think none of them are such as to require its reversal. In the second case it appears that, in the fall of 1841, the Arbon Coal Company, being indebted to the defendants for freights upon coals carried over the defendants’-road, to an amount exceeding the amount of the notes which form the *562 subject of the suit, made the notes payable to the defendants’ order, and delivered them .to Mr. Wilson, their president, to enable them to raise money to meet their accruing liabilities. No specific application was made of the notes upon the indebtedness of the coal company, nor is it shown that any particular arrangement was made. as to the manner in which they ■should be accounted for by the defendant. Mr. Wilson indorsed the notes in the name of the defenants, and, with the aid of Mr. Bostwick, one of his associates on the executive committee, procured them to be discounted in behalf of the defendants. What became of the money, does not appear. It is insisted, on the part of the defendants, that the indorsement of the notes was made for the accommodation of the Arbon •Coal Company, and was, therefore, not binding upon them. It is a sufficient answer to this position to say, that the referee has not so found the fact, and that the burden of proof upon that point, if the defendants relied upon it, rested with them. I have, however, discovered nothing in the evidence which tends to show that the indorsements were made for the accommodation of the coal company. If the notes were given to apply on the indebtedness of that company for freights, they became the property of the defendants, and in transferring them,, they occupied the position of ordinary indorsers transferring business paper. If they were not to apply on the indebtedness of the coal company, then they would appear to have been made for the accommodation of the defendants, and, after their discount, the defendants were the principal debtors and the Arbon Coal Company their sureties. Neither view can aid the defendants, and no other view is admissible, in the absence of evidence that the coal company received the avails of the notes. If the right of the defendants to borrow notes admits of question (1 Sandf. S. C., 53; 15 N. Y., 219), we should be bound, in support of the judgment, to presume that the referee found the notes to have been given on account of the *563 indebtedness, inasmuch as there was evidence from which he might have so found. (21 N. Y., 551, 552; 22 id., 324.) ' The question which is made as to the authority of Wilson to bind the corporation by his indorsements of the notes, is governed by the same principles as that in regard to his right to make the draft, which has already been considered and decided in the other case, and must receive in this the same determination. With some hesitation, I have come to the conclusion that the evidence of the service of notice of protest was sufficient. The statute contemplates but a single certificate as evidence of the presentment of a note or bill for payment, its protest, and the giving of notice of its dishonor. The language of the statute is this: “ The certificate of a notary, under his hand and seal of office, of the presentment by him of any promissory note or bill of exchange for acceptance or payment, and of any protest of such bill or note for non-acceptance or non-payment, and of the service of notice thereof on any or all of the parties,” &c., “ shall be presumptive evidence of the facts contained in such certificate.” (3 R. S., 5th ed., 474.) The notary may undoubtedly certify to each of the acts separately, but he may also, by one certificate, verify them' all. If the certificate be “ under his hand and seal of office,” it is sufficient, and it cannot be of any importance where the seal is affixed. It may be at the beginning, at the end, or anywhere upon the margin, or it might be appended by a ribbon, after the manner of the sealing of ancient charters. The officer is not required to certify to the sealing, but it is sufficient if the seal, be, in fact, affixed, and the name signed. Unquestionably, therefore, if the seal had been placed where it is, and the signature only at the bottom of the last part of the certificate, the whole would have been sufficiently verified. I do not think it is any the less so by reason of the words, “ In testimonium veritatis,” with the signature opposite the seal, between the two parts of the certificate. The whole may, with propriety, be regarded as one certificate, once sealed and twice signed. I adopt this conclusion the more readily, because the objection is merely *564 formal, the certificate, in its present form, furnishing all the security against error, and imposing upon the notary all the responsibility which it could do' if another seal were added. A single private seal has often been held to bind several parties (Mackay v. Bloodgood, 9 Johns., 285; Van Alstyne v. Van Slyck, 10 Barb., 887); a seal in the space between the penal part of a bond and its condition, makes the condition a part of the sealed instrument (Reed v. Drake, 7 Wend., 345); conditions of insurance annexed to a policy are regarded as a part of the policy (Roberts v. The Chenango Mut Ins. Co., 3 Hill, 501); anda seal at the foot of a deed, absolute on its face, is applicable to a defeasance indorsed upon the back of the deed, without date or signature. (Stocking v. Fairchild, 5 Pick., 181; Emerson v. Murray, 4 N. H., 171. The case, however, most nearly resembling the present, of any to which our attention has been called, is that of The State v. Coyle (33 Maine, 427). In that case a complaint and justice’s warrant in pursuance of it, were written on the same piece of paper, and the only seal was at the end of the justice’s signature to the complaint, the warrant being written beneath it. It was held that the warrant was sufficiently sealed. These authorities, particularly the last, justify the admission of the certificate of the notary, especially as such certificate furnishes presumptive proof only of the facts contained in it,, concluding neither of the parties. The evidence which was offered, as to the value of the property mortgaged by the Arbon Coal Company to Ketchum, as security for the -payment of the notes in suit and other demands, was properly excluded. The mortgage contained a provision that, in case default should be made in the payment of the sum which it was made to secure, the mortgagee might take immediate possession of the property, and, after giving reasonable, notice, might expose the same to sale at public vendue to the highest bidder, and apply the proceeds of such sale towards the payment-of said sum and the interest, rendering the surplus, if any, to the said Arbon Coal Company. In pursuance of this power the property was sold at auction in August, 1843, and all, or' the greater part of it, bid off by *565 Mr. Ketchum, the mortgagee, for the benefit of the creditors whose demands the mortgage was intended to secure. It was not attempted to be shown that the sale was. not conducted in good faith, or that reasonable notice was not given, according to the terms of the mortgage; but it was insisted that the trustee could not purchase for his own use, or for the use of • the creditors of the mortgagor, at the sale conducted under his direction, and that, consequently, the right of the parties remained the same as if the mortgagee had taken and retained possession of the property, without a sale. If that was the correct view of the position of the parties, the defendants were entitled to the benefit of the proof which they offered, as in such case the mortgagee would be chargeable with the value of the property, to be applied in the reduction of the amount due on the mortgage. (Spencer v. Harford, 4 Wend., 385, 387; Morgan v. Plumb, 9 id., 292; Case v. Boughton, 11 id., 106; Carter v. Stevens, 3 Denio, 35; Craig v. Tappen, 2 Sandf. Ch., 88.) Ketchum was a trustee of the mortgagor, as well as of the creditors whose demands were secured by the mortgage. In his character of trustee, he owed to all those parties the duty of so managing the sale as to obtain the highest price which the property would bring. Under such circumstances, if he occupied that character only, he could not become a purchaser for his own benefit. A trustee or agent will not be allowed to assume a position in which his interest will come in conflict with his duty (Davove v. Fanning, 2 Johns. Ch., 252; De Caters v. Chaumont, 3 Paige, 179; Van Epps v. Van Epps, 9 id., 238; Iddings v. Bruen, 4 Sandf. Ch., 223-263; Moore v. Moore, 1 Seld., 256); and this rule is equally applicable to transactions in real, and in personal estate. (Cook v. Collingridge, Jacob, 607; Wedderburn v. Wedderburn, 2 Kern., 731; Hall v. Hallett, 1 Cox, 134; Anon., 1 Salk., 155; Ames v. Downing, 1 Bradf., 321; White & Tudor’s L. C., 111.) As trustee, merely, he wóuld be equally prohibited from purchasing for the benefit of a part of those interested in the sale. (3 Paige, 178.) He was, however, a creditor, whose demand, in common with others, was secured by the mortgage, and his purchase was made in behalf of- all *566 such creditors. If, in any case, a mortgagee of chattels, selling them at auction in pursuance of a power of sale contained in the mortgage, can become the purchaser of the mortgaged property and hold it discharged from any right of redemption, -the purchase by Ketchum was effectual for that purpose. It has, if I am not in error, been generally supposed that the power of sale, given to a mortgagee of chattels, whether given expressly, or left to be implied by law, authorized the mortgagee to purchase the property, at a fair sale under such power, for his own use; that express notice to the mortgagor which is required to make the foreclosure effectual (Hart v. Ten Eyck, 2 Johns. Ch., 100; Patchin v. Pierce, 12 Wend., 63; Charter v. Stevens, 3 Denio, 35,) came in place of a decree authorizing the parties to purchase; and that persons having such notice were bound to attend and protect their interests by bidding, if protection were necessary. (Bergen v. Bennett., 1 Caines’ Cases, 1-14-19; Slee v. The Manhattan Company, 1 Paige, 52-74.) A different opinion was expressed in the case of The Buffalo Steam Engine Works v. The Sun Mutual Insurance Company (17 N. Y., 401); but the case was disposed of on other grounds, and the point still remains undetermined. The inconvenience and expense of a resort to the equity powers of courts to effect such foreclosures, which would be the probable consequence of denying to mortgagees the right to purchase, might be productive of greater oppression to mortgagors than could result from'maintaining that right. Unfortunately, injustice cannot always be prevented by subjecting sales to the direct control of courts, and such control should not be assumed unless experience has demonstrated its necessity. The practice has prevailed in this state from a very early day of allowing mortgagees to become purchasers at sales conducted by them, under powers contained in mortgages of real estate; and that course was sanctioned by a statute passed in 1808, in consequence of a doubt having been expressed in the Court for the Correction of Errors, as to the validity of such purchases. (1 Paige, 73; 1 Caines Cas., 3-19; 2 R. S., 546, § 7.) *567 The long continuance of this practice, and the approbation which it has received from' the legislature, afford strong evidence that no great inconvenience or injustice arises from it; and it is not perceived why a similar course, in sales under 'mortgages of chattels, would be attended with greater danger. It is unnecessary, however, - in the present case, to decide this question, as there are other grounds upon which the purchase by Ketchum must be sustained. A purchase of trust property by a trustee at public sale, has always been held valid at law, and is voidable only and not void in equity. It is voidable only at the election of the persons whose interests are affected by the purchase. (Jackson v. Van Dalfson, 5 Johns., 47; Jackson v. Walsh, 14 id., 207; Wilson v. Troup, 2 Cow., 196-238; Mackintosh v. Barber, 8 Eng. C. L., 1st ed., 247; Campbell v. Walker, 5 Ves., 678, and note a, Sumner’s ed. ; Whichcote v. Lawrence, 3 Ves., 740, note a.) The defendants here are not competent to make that election. The mortgagor (The Arbon Coal Company) is the party most directly interested in the question, and the validity of the sale cannot be impeached without its consent, or at least without giving it ah opportunity to be heard. (Davoue v. Fanning, 2 Johns. Ch., 267, 268; Munro v. Allaire, 2 Caines Cas., 194; Whelpdale v. Cookson, 1 Ves., Sen., 9; S. C., 5 Ves., 682; Harrington v. Brown, 5 Pick., 519.) The proper parties not being before the court,the question which it was the design of the defendants, by the evidence offered, to present, could not be considered, and the evidence was properly rejected. Possibly, the delay which had occurred since the sale would, of itself, as was claimed by the plaintiff’s counsel, have justified the exclusion of the evidence (Hawley v. Cramer, 4 Cow., 718-743); but there are equitable considerations on the other side -bearing upon that question, and I express no opinion upon it, the other ground being entirely sufficient to justify the decision of the referee. The judgment of the Supreme Court in both cases should be affirmed. All the judges concurring, Judgment affirmed.