Trustees of East Hampton v. Bowman — 14 N.Y.S. 668

Majority

p. 668

Trustees, Etc., of East Hampton v. Bowman.

(Supreme Court, General Term, Second Department.

May 11, 1891.)

Headnote

'Towns—Unauthorized Conveyance—Ratification.

One D., as one of the trustees of plaintiff town, forged a resolution authorizing him to sell and convey town property, and such trustee afterwards conveyed the property to defendant, received the purchase money, and forged a resolution ratifying the sale. New town officers, seeing the resolution on record, and being deceived thereby, called on D. to account for the proceeds, and, on his failure to do so, they sued him. The fraud was not discovered until after execution in the action was returned unsatisfied. It did not appear that any proceedings were taken to enforce the judgment after the discovery of the fraud. Held, that the proceedings in the action against D. were not a ratification of the sale to defendant, so as ' to give him a good title as against the town.

Appeal from circuit court, Suffolk county.

Action by the trustees of the freeholders and commonalty of the town of East Hampton against John A. Bowman' to cancel a deed of town property made to defendant. ' One Downing, one of the trustees, forged the resolutions authorizing the sale and ratifying the deed. There was a judgment •for plaintiffs, and defendant appeals. ■

The opinion of Barnard, P. J„ at circuit, is as follows: “This case is not -a plain one; there is no doubt but that the record was forged. The words in•teriined, giving the committee authority to sell, were not in the resolution as passed. The words were put thereto defraud. After the record was altered-, •■the clerk’s copy seemed to evidence a good record. The question is not one -of a'transaetion with an agent, but with a title acquired by forged authority to sell. The defendant got no title under such a power. Did the town lose its right because a subsequent board of trustees sued for the consideration ■stated in the deed? This body was in ignorance of the forgery when the action was commenced. During the trial some of the defendants denied all knowledge of the resolutions. The trustees prosecuted to judgment upon the theory and with the full belief that the resolution was passed. It now ■appears that it was never passed, and I think there is nothing in the former -action which ratifies a' forged resolution. Ratification rests upon knowl

p. 669

edge, and this was wanting. The defendant has therefore no title. The-deed rests upon nothing, and the appearance should be removed, so that the-town title may be unclouded by it. Judgment for plaintiff, without costs.”

Argued before Dykman and Pratt, JJ.

Henry C. Platt, for appellant. W. M. Smith, for respondents.

We concur in the opinion of the learned trial judge. The town, never authorized the conveyance of the lands in question. The minutes; which on their face appear to attest such authority, were, in that respect, forged. The grantee doubtless dealt with the faithless representative of the town, and paid his consideration money in good faith. It could scarcely be-decreed otherwise. So far, then, the case is clear. A person standing in an official position towards a town, having no authority save that derived by resolution of the town officials, simply cheats a man into paying money over-to him by exhibiting false tokens as to the extent of his authority, and delivering a deed which is without a shadow of authority. Downing simply lied to Mr. Platt, and backed up his lie by exhibiting a resolution which was genuine impart, but false and forged in the vital matter of authority. No. corporation could conduct business if any other rule prevailed than to hold that this faithless official had thus simply swindled an innocent man out of his money. But now comes the tight place in the case. New town officials, found this record. They were themselves deceived thereby. Downing thus misled them so that they, too, relying on his fraud, call on the faithless, official to pay over the money which they suppose that he has collected for and with authority of the town. They sue him, and recover a judgment. They issue an execution, but get nothing. Hence, while the town thus appears to ratify the collection and thus to ratify the transaction out of which it arose, the essential and vital element of the doctrine of ratification is, nevertheless, wanting,—knowledge of the facts of the case. The town officers were misled into that suit. The swindler succeeds in getting all parties into-a false position. Now, if we were to hold that this judgment was a ratification, we should hold that Downing might swindle the town into an election to ratify; and that plainly involves unsound reasoning. The question of estoppel does not arise until we determine the point of election and ratification. But the town did not discover the fraud until after the execution was returned unsatisfied. There is no evidence that it has taken a single step in-pressing its judgment against Downing after the discovery of the truth in the premises. If it had, it would be difficult to defend the town against the-consequences of election and ratification, under the rule in Bowker Co. v. Cox, 106 N. Y. 555 , 13 N. E. Rep. 943 . But the town has taken no step.. It has simply stopped. Ought it to have procured the modification of the judgment against Downing by rejecting therefrom the money claimed or collected from Bowman ? Perhaps that would have been a wise thing to do as a. measure of prudence-to evince and emphasize its election to repudiate Downing’s wrongful act. But it was not, as it seems to us, necessary so to do. It was a question of fact whether or not the town did promptly repudiáteDowning’s wrong when it discovered its right so to do. The fact that it suffered the judgments to stand was merely a circumstance which, with others, might tend to show an election to ratify. But the findings and disposition of defendant’s requests by the learned trial judge pretty clearly show that the town never did in fact elect to ratify Downing’s wrongful act, or do-any act amounting to such a ratification, after discovery of his fraud. The election to repudiate it would always be an answer, in Downing’s favor, to any attempt on the part of the town to enforce the judgment. That is no-affair of Bowman’s. * He neither lost nor gained anything by the conduct of the town in this respect. He simply stands where he stood before the town-sued Downing at all. He is simply the victim of Downing’s fraud. Per

p. 670

haps a different question would have arisen if the town had collected any of the money under that part of the judgment which rested on Downing’s collection from Bowman. Indeed, that might be true even if it had collected ■anything under the judgment, for it constituted an entire recovery. But -even then I incline to think that if it had promptly turned the collection over to Bowman on discovering Downing’s fraud, it might still have been entitled to avoid the- deed for want of authority. The town would have been in no worse position than if Downing had voluntarily paid over the money received "from Bowman. Suppose, for example, that some stranger had made this forged alteration of the town minutes, and that Downing had honestly supposed he had the authority, and had made this deed under those circumstances, •and then collected the money from Bowman, and paid it over to the town; would not the whole business have been a mistake which a court of equity would have had power =to correct on prompt repudiation by the town and return or offer to return the money to Bowman? But, of course, it is unnecessary to speculate on the point. The views above indicated lead us to the conclusion that we must affirm this judgment, but, under the peculiar circumstances of the case, and the novelty of the question, we shall deny costs.

Cases cited

Bowker Fertilizer Co. v. Cox 106 N. Y. 555 N.Y. 1887-10-04 p. 669