Trustees of the Freeholders & Commonalty v. Bowman , 136 N.Y. 521 ( 1893 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] 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. 387). 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 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. The invalidity of the deed can be shown only by parol 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 holding otherwise. (Lattin v. McCarty, 41 N.Y. 107;Remington Paper Co. v. O'Dougherty, 81 N.Y. 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 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 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 Dominy; 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 Dominy 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 rule should be strictly enforced that 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 Dominy 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 Dominy as represents the $200 paid by the defendant to him, and as thus modified it should be affirmed, with costs.

All concur.

Judgment accordingly.