Chetwood v. Berrian. themselves exclude the idea of any other disposition than a sale out and out. Under a power so general and comprehensive, and so entirely free from all restriction or limitation whatever, as that granted by the complainant in this case, the attorney may, I think, do anything with a mortgage which may be effected by an assignment. The only limitation on his power, under such a comprehensive grant, is that he must use the power for the benefit of his principal. In no case can an agent use the power conferred upon him for the benefit of any other person than his principal, except his authorization gives him express permission to do so. But while this is true, it is also true that if an agent, while doing an act which his principal has authorized him to do, represents that he is doing it for his principal, but it should turn out that his representation was false, and the result should show that he did the act for himself, his principal would nevertheless be bound. The contract in this case was made in the state of New York, and it was to be performed there; its validity and construction must, therefore, be determined by the law of that state. Now, it has long been the law of that state that whenever the act of an agent is authorized by the terms of the power constituting him an agent, that is, whenever, by comparing the act done by the agent with the words of the power, the act is in itself warranted by the terms used, the act is, as to all persons dealing with the agent in good faith, the act of the principal. Such persons are not bound to inquire into facts aliunde. The apparent authority is as to them the real authority. This rule was first declared in North River Bank v. Aymar, 3 Hill 262. That case, it is said, was afterwards reversed by the court of errors, and that the reversal proceeded on the ground that the legal rule above stated was erroneous. The opinion, however, of the court of errors has never been reported, and the history of the case here given will be found in the dissenting opinion of Judge Comstock, in Farmers and Mechanics Bank v. Butchers and Drovers Bank, 16 N. Y. 154. But the doctrine declared in North River Bank v. Aymar has since been repeatedly affirmed by the court of appeals of New York, and is now the established Chetwood ข. Berrian. law of that state. Farmers and Mechanics Bank v. Butchers and Drovers Bank, 16 N. Y. 125; Griswold v. Haven, 25 N. Y. 595; Exchange Bank v. Monteath, 26 N. Y. 505; Bank of New York v. Bank of Ohio, 29 N. Y.619; Westfield Bank v. Cornen, 37 N. Y. 320. In two of the cases above cited, it is said that where the party dealing with an agent has ascertained that the act of the agent corresponds in every particular, in regard to which such party has or is presumed to have any knowledge, with the terms of the power, he may take the representation of the agent as to any extrinsic fact which rests peсиliarly within the knowledge of the agent, and which cannot be ascertained by a comparison of the power with the act done under it. My conclusion is, that the act of the attorney in this case was within the power with which his principal had invested him, and that his principal is bound by his declaration as to his object in exercising the power. But if a different result had been reached on this branch of the case, and it had been found that the attorney's act was unauthorized, still I think the complainant would not have been entitled to relief. The lands in question were conveyed to Berrian in July, 1881. The complainant was notified of the conveyance in October, 1881, and he says on receiving such notice he made up his mind to come to America; but, after reflection, he concluded to postpone his return until the following spring, as he usually suffered a great deal on a sea voyage, and they were always tempestuous in the winter season. So far, perhaps, there is nothing which would justify the court in saying that the complainant was bound, if he believed his attorney had exceeded his authority, to disown his act without delay, or otherwise be concluded by it. Inaction or silence by a principal will never have effect to ratify the unauthorized act of his agent, unless it is shown that the principal did nothing or said nothing after he was fully informed of what his agent had done. So far, all we know is that the complainant, on receiving notice that a conveyance had been made to Berrian, desired to return to America, but was deterred from doing so by fear of personal discomfort, Chetwood v. Berrian. and that he remained in Paris until the following April, without, in the meantime, seeking any information of his attorney, respecting the conveyance to Berrian. The complainant, on his return to this state in April, 1882, went to the residence of his attorney at Elizabeth, and took up his abode there, and continued to reside with him until April, 1883. He admits that his attorney, in May, 1882, gave him full information in writing respecting his transactions with Berrian, and also told him that he had spent all his personal estate. The bill in this case was not filed until June 23d, 1883. Up to that time the complainant had, in no way, indicated that he thought the act of his attorney, in this particular transaction, was in excess of his power, or that he intended to repudiate it. On the contrary, his daily conduct, for nearly a year after he was in full possession of all the facts, constantly gave the very strongest assurances that he had condoned the faults and crimes of his nephew, and meant to stand by his acts. For nearly a year after he was fully acquainted with his nephew's frauds, he remained a member of his nephew's family, daily associating with him as a reputable citizen, and taking no step either to obtain justice for himself or to bring his nephew to justice. If his purpose in this course of conduct was, by gentle means and seeming to forgive, to procure re-imbursement for his losses to the extent of his nephew's property, and then, when he had got all he could get out of him, disown and repudiate his nephew's act, and attempt to compel those who had dealt with his nephew, as his representative, in good faith, to respond to him for his nephew's wrongs, his laches should, on the plainest principles of justice, be held to be fatal to his purpose. The rule is settled that where the silence of a principal may cause loss to a third person, or give him an advantage, he must, without unreasonable delay after the fact comes to his knowledge that his agent has exceeded his authority, disown his agent's act and afford the other party an opportunity to protect himself, or he will make his agent's act his own. 1 Chit. on Cont. (11th Am. ed.) 291; Bendict v. Smith, 10 Paige 126; Vianna v. Barclay, 3 Cow. 281. In Cairnes v. Bleecker, 12 Johns. 300, Judge Spencer said: "It is a salutary rule, in relation to Farmer's Executor v. Farmer. agencies, that when the principal is informed of what has been done [if his agent has exceeded his authority], he must dissent, and give notice in a reasonable time, or otherwise his assent to what has been done shall be presumed." In that case silence for less than four months was held to constitute a ratification. The complainant's bill, as against Berrian, must be dismissed, with costs. THE EXECUTOR OF GEORGE FARMER, deceased, υ. ELIZABETH H. FARMER et al. 1. The legislation of this state, enlarging the capacity of a married woman to acquire and dispose of property, does not give her capacity to make a legal contract with her husband. 2. A wife may bestow her property, by gift, on her husband, or she may make a contract with him which will be upheld in equity, but the courts always examine such transactions with an anxious watchfulness and dread of undue influence. 3. Where a contract is made by parties holding confidential relations, so that it is probable that they did not deal on terms of equality, but that unfair advantage might have been taken by the stronger party of the weaker, there the burden, if the contract is assailed, rests on the stronger party to show that no advantage was taken, otherwise fraud will be presumed. On final hearing on bill and answer, and cross-bill and answer, and proofs taken in open court. Mr. Frank B. Colton and Mr. John W. Taylor, for complainant. Mr. William B. Guild, for defendants. VAN FLEET, V. C. This suit is brought by William H. Peck, one of the executors of the last will and testament of George Farmer, deceased, against 39 211 49 199 39 211 52 5:27 39 211 61 20 39 211 63 92 63 248 Farmer's Executor v. Farmer. Elizabeth H. Farmer, his co-executor, and also against Eli H. Reynolds and James N. Duffy, who, together with the complainant's co-executor, were on the 10th of May, 1881, carrying on business, as copartners, under the name of Reynolds, Duffy & Co. The object of the suit is to procure a decree declaring whether a certain promissory note constitutes part of the estate of the testator, or is the individual property of Elizabeth H. Farmer. The material facts may be summarized as follows: Elizabeth is the widow of the testator. She and the testator were married on the 18th of February, 1874. At the date of their marriage she was the owner of considerable property, and a member of a partnership engaged in the manufacture of leather. The principal part of her property consisted of the capital she had contributed to the partnership, and of the real estate used by the partnership. The latter she owned in severalty, and let to the firm at a rent of from $10,000 to $12,000 a year. In May, 1874, Mrs. Farmer gave the testator a power of attorney, authorizing him to manage and conduct her business, and to do, generally, all things pertaining thereto. Under this authority the testator conducted all his wife's transactions with the firm up to the time of his death, which occurred on the 27th of July, 1883. The firm paid him the rent of the lands they held under her, and also her share of the profits of the business. On the 10th of May, 1881, the firm made a note, payable on demand, after date, to the order of Mrs. Farmer, for $12,478, for her share of the profits of the business up to the preceding January. This note, endorsed by Mrs. Farmer, was found among the testator's papers after his death, and is the subject of the present controversy. The bill alleges that the note was endorsed to the testator for a good and valuable consideration, and thereby became his property. Mere possession by an endorsee of a negotiable note, regularly endorsed by the payee, is, in ordinary cases, all that is required to make a complete case for the endorsee. Here, however, the parties were, in consequence of their matrimonial connection, incompetent to enter into a legal contract with each other. |