Trustees of the Freeholders v. Bowman — 49 N.Y. St. Rep. 820

Majority

p. 820

The Trustees of the Freeholders, etc., of the Town of East Hampton, Resp’t, v. John A. Bowman, App’lt.^[1]

(Court of Appeals,

Filed January 17, 1893.)

Headnote

Towns—Unauthorized deed—Ratification.

A resolution of the board of trustees of respondent, appointing a committee, was altered by one of its members so as to give them power to sell and convey lands belonging to the town. By means of said forged resolution said trustee, one D., induced defendant to accept a deed of lands from him and to pay him the purchase price thereof, and thereafter forged a resolution confirming the sale. Subsequent town officials, who found the record, sued D. for the proceeds, and did not discover the fraud until the execution was returned unsatisfied. Held, that as the trustees who brought the action against D. for the accounting at the commencement of the action had no knowledge whatever of the fraud perpetrated upon the town by the unauthorized execution of the deed, the ratification on the part of the town was not so clearly established as to authorize a reversal of the judgment, but as plaintiffs now hold a judgment against D., in which the money paid to him is included, plaintiffs should be required to assign to defendant so much of the judgment as relates to the money paid toD.

Appeal from judgment of the supreme court, general term, second department, affirming judgment for plaintiff.

The town of Bast Hampton is a municipal corporation incorporated under and by virtue of a colonial charter or patent known as the Dongan patent, dated December 9, 1686. By virtue of the patent it is the owner of all the common land and land under water within the limits of the town, and it is represented by and acts through twelve trustees who are elected by the people at the annual town meetings on the first Tuesday in April in each year. The trustees are clothed with full power over the town lands and have authority to sell and lease them. At the town meeting in April, 3882, among the trustees elected were Seymour L. Tooker and Nathaniel Dominy, and Tooker was during the year following his election president and clerk of the board of trustees. On the 17th day of April, 1882, the following resolution, except the words italicised, was adopted at a meeting of the trustees:

“ Resolved, that Marcus B. Hand, Charles J. Mulford, Nathaniel Dominy, Sr., William Cullom, William D. Conklin, GeorgeB. Edwards, be and are hereby appointed a general prosecuting committee with power to sell or convey, and also a committee on privileges, with power to act as they deem expedient, Nathaniel Dominy, chairman of above committee.” Subsequently the words italicised were inserted in the resolution by Dominy without the knowledge or consent of the other trustees, and without any authority. The resolution as passed was recorded in the book of records kept by the trustees and the italicized words were interlined. Dominy also wrote in the book of records another resolution, conferring authority upon the committee to sell the town lands, which resolution was not passed by the board of trustees, and was written in the book of records without their knowledge or consent. In the fall of that year the defendant entered into negotiations with Dominy to purchase a large quantity of town lands, and these resolutions

p. 821

were shown to his agent who 'conducted the negotiations, and a deed in due form was executed by Seymour L. Toober, one of the trustees, who affixed the seal of the town thereto, and the defendant paid $200, the purchase price thereof, to Dominy and tookthe deed. The deed was dated and executed on the 14th day of December, 1882. This action was commenced in February, 1888, to set aside and cancel that deed on the ground that it was executed without authority of the trustees and was, therefore, void and a cloud upon the title of the plaintiff to the land. The plaintiff, in its complaint, alleges that the deed was made, executed and recorded without any authority, and that it had no validity whatever, and it demanded judgment that it be set aside and canceled of record as a cloud upon its title. The answer of the defendant put at issue the material allegations of the complaint, and the action came on for trial at a special term of the supreme court, and the trial judge found that the deed was executed without authority and ordered it to be set aside and canceled of record. The general term having affirmed the decision of the special term, the defendant appealed to this court.

Thomas Young, for app’lt; Wilmot M. Smith, for resp’t.

There was no dispute at the trial that the deed from the town to the defendant was, in fact, executed without authority, and that the apparent authority found in the town records was actually forged and spurious. The town was not bound by the representations of Dominy as to his authority to deal with the defendant, because he was not, in fact, the agent of the town for the sale of these lands, and had no apparent authority to dispose of them. Separate from the other trustees, he had no agency or authority whatever. The trustees as a body were the agents of the. town, and no one trustee could act separately and independently for the town unless duly authorized to do so by the trustees acting' as a body, and hence no representations that he could make, and no action that he could take individually, could in any way affect, the rights of the town. Hence the rule laid down in Morawetz on Corporations (vol. 2, p. 610), and in the authorities there referred to, to which our attention is called by the defendant’s counsel, has no application to this case. We, therefore, start in the discussion of this case with the fact that the defendant has placed upon record and holds a deed which is, in fact, invalid,, under which he asserts title to the lands.

The counsel for the defendant, however, contends that the action cannot be maintained for the reason that no facts are alleged in the complaint, or found by the trial judge, which entitled the plaintiff to maintain this equitable action to remove the cloud upon its title caused by the defendant’s void deed, and he cites Moores v. Townshend, 102 N. Y., 391 ; 2 St. Rep., 440 . No such objection was made at the trial. It was not there claimed that the complaint was not sufficient, or that the facts proved on the-part of the plaintiff did not entitle' it to equitable relief. If any objection had there been made to the complaint, an amendment thereof might have been allowed, and the objection cannot be

p. 822

taken here for the first time. Even if there should have been some other findings to justify the equitable relief, the judgment .should not, for that reason, be reversed, if evidence be found in the case which would justify other findings necessary to uphold the judgment. When we-look into the evidence, what do we •find? That there is a void deed placed upon record constituting .a cloud upon the plaintiff’s title. This invalidity of the deed can be shown only by paroi evidence, and is not matter of record; and the evidence does not show that the defendant is so in the possession of the land that the plaintiff could maintain an action of ejectment. Under such circumstances we think it cannot be successfully disputed that the plaintiff is in a position to maintain this equitable action for relief, and we know of no authority in this court for holding otherwise. Lattin v. McCarty, 41 N. Y, 107 ; Remington Paper Co. v. O' Dougherty, 81 id., 474.

But the main defense relied upon by the defendant at the trial, and now relied upon, grows out of the facts now to be stated. The defendant paid Dominy for the land $200, which he kept and appropriated to his own use. In August, 1884, the trustees of the town, then in office, commenced a suit against the persons who were trustees during the year in which the deed to the defendant was given, to compel them to account for and pay over certain moneys belonging to the town, and in that action, among other claims made against Dominy as a defendant therein, the plaintiff claimed to recover the $200 paid to him by the defendant. That action was tried and proceeded to judgment, and the plaintiff, among other things, recovered judgment against Dominy for that $200, and execution upon that judgment was issued against him and returned unsatisfied. Thus the town has failed to collect or receive the money paid to Dominy by the defendant for the land. The claim on the part of the defendant is that the plaintiff in that action proceeded to judgment and execution, knowing that the deed was executed without authority and that the money was received by Dominy without authority, and that thus it ratified Dominy’s unauthorized act and became bound thereby. It is quite true that the trustees, acting for the town and clothed with authority to convey these lands, could ratify the unauthorized conveyance which had already been made to the defendant, and that the town could be bound by their ratification. But before a principal can be held to have ratified the unauthorized act of an assumed agent, he must have full knowledge of the facts, so that it can be said that he intended to ratify the act. If his knowledge is partial or imperfect, he will not be held to have ratified the unauthorized act, and the proof of adequate knowledge of the facts should be reasonably clear and certain, particularly in a case like this, where, so far as the record discloses, no substantial harm has come to the defendant from the delay or the acts of the principal. In this case it is found, and appears from the evidence clearly, that the trustees who brought the action against Dominy and others for the accounting, had, at and before the commencement of the action, no knowledge whatever of the fraud perpetrated upon the town by the unauthorized execution

p. 823

of the deed. During the progress of the trial of that action, however, there was some evidence tending to show the unauthorized execution of the deed by Dorniny; but the proof was given by the defendants who were resisting payment to the plaintiff in that action, and, as the trial judge found, the trustees of the town did not believe that evidence thus given by the parties sued in their defense to that action, and it is found that they proceeded to judgment and execution in ignorance of the fraud which had been perpetrated by Dorniny upon the town.

We do not, therefore, think that the ratification on the part of the town by its trustees was so clearly and unequivocally established that we would be authorized to reverse this judgment ►Before a municipal corporation can be held to have ratified the unauthorized act of its officers or assumed agents, the facts constituting the ratification should be fully and clearly proved, so-that it can fairly be said that there was an intention to confirm the unauthorized act and receive the fruits' thereof. Here there is no conclusive proof to that effect.

But as the plaintiff now holds a judgment against Dorniny, in-which the $200 paid to him by the defendant is included, we think that as a condition of relief in this action it should be required to assign so much of that judgment as relates to the $200-to the defendant.

Our conclusion, therefore, is that the judgment entered at the special term should be so far modified as to require the plaintiff to assign to the defendant so much of the judgment recovered by it against Dorniny as represents the $200 paid by the defendant to him, and, as thus modified, it should be affirmed, with costs.

All concur.