Rogers v. . Pell

49 N.E. 75, 154 N.Y. 518, 8 E.H. Smith 518, 1898 N.Y. LEXIS 1059

• Court: New York Court of Appeals
• Decided: January 11, 1898
• Status: Published

Opinion

Vann, J.

The right of the plaintiff to maintain this action depends upon the validity of the assignment purporting to have been made to him by the Rogers Manufacturing Company, which, although incorporated under the laws of another state, had the power to make a general assignment for the benefit of creditors under the laws of this state, provided such assignment was also valid under the law of the domicile of said corporation. (Vanderpoel v. Gorman, 140 N. Y. 563.) The validity of that assignment is not questioned on the ground of fraud, but because, as it is alleged, it was made without the authority of the board of directors, was not properly acknowledged and was executed under the insolvent laws of the state of Rew Jersey, so that it transferred no title as against judgment creditors in this state. (Barth v. Backus, 140 N. Y. 230; Boese v. King, 78 N. Y. 471.)

The contention that there was a want of authority is based on the allegation that the president was not authorized to execute an assignment to any one, and, least of all, to himself.

As neither statute nor by-law regulating the subject was shown, the power of the corporation to make a general assignment resided in the directors. (Vanderpoel v. Gorman, supra.) Hence the president had no authority to execute the instrument in question unless it was conferred upon him, expressly or impliedly, by the resolution adopted by the board. While that resolution does not expressly authorize the president to make an assignment for the company, we think it does so by implication, because it directs “ that the company execute a general assignment,” and the president, as the executive officer of the coloration, was the one to carry into effect the direction. The corporation could not act for itself, and the nature of the business demanded prompt action. The directors adjourned immediately after the resolution was passed without specifically deputing any one to act for the corporation or themselves in the premises. Under these circumstances, power in the president to act for the directors by carrying into effect their resolution is fairly to be implied.

But, while he had power to select the assignee, he had no power, as against the corporation, to make a selfish use of the trust committed to him by selecting himself in the absence of express authority to that effect. (Bank of New York v. A. D. & T. Co., 143 N. Y. 564; Wilson v. Metropolitan El. R. Co., 120 N. Y. 145; Berdell v. Allen, 2 Silvernail, 449, 452.) The choice of an assignee necessarily involved the exercise of judgment and discretion. It was the duty of the president to make the best choice that he could in the interest of the company and to keep his judgment unclouded by personal interest in order that he might do so. While the assignment was not beneficial to him, as the title was in trust, still he had an interest in his fees and in the importance of a position which involved the control of a large amount of property and the transaction of business of consequence. We think, therefore, that he exceeded his authority, so far as the corporation itself was concerned. The result, however, did not make his action absolutely void, but voidable at the election of the company. It was the act of a wrongdoer, who could not avoid it himself after it ivas done, although the party wronged could have avoided it by electing'to rescind and acting on the election within a reasonable time after the assignment was made. There is no evidence that the corporation, or any one authorized to act for it, ever sought to rescind or did anything from which an intention to rescind could be inferred, and the period of eighteen months that elapsed between the time of the trial and the date of the assignment was strong evidence of ratification by the company. (Sheldon Hat Co. v. Eickemeyer Hat Co., 90 N. Y. 607; Kent v. Quicksilver Mining Co., 78 N. Y. 159.) Hostile third parties, such as judgment creditors, could not elect for the corporation nor take any advantage of the president’s mistake, except to make use of it upon an application to the proper authority for the removal of the assignee as a person unfit to discharge the duties of the trust.

Under the Assignment Act of 1860 it was held that both the acknowledgment and the indorsement of a certificate thereof were essential to the transfer of title. (Hardmann v. Bowen, 39 N. Y. 196; Britton v. Lorenz, 45 N. Y. 51; L. 1860, ch. 348.) The Assignment Act of 1877 requires that every assignment for the benefit of creditors shall be “ duly acknowledged before an officer authorized to take the acknowledgment of deeds, and every such * * * assignment shall be recorded.” (L. 1877, ch. 466, § 2.) It differs, however, from the preceding act in not specifically requiring that the acknowledgment shall be evidenced by a certificate thereof indorsed on the assignment before delivery. The change was doubtless owing to the fact that the Revised Statutes make provision for the method of taking and certifying acknowledgments by requiring every officer taking an acknowledgment to indorse a certificate thereof, signed by himself, upon the conveyance. (1 R. S. 759.) The position that, since the change in the statute, an oral acknowledgment without certification is sufficient, we regard as unsound, for the law knows no “ acknowledgment,” made before a magistrate or notary, unless it is certified. The word, as commonly used by the legislature, the courts and the bar, means both the act and the written evidence thereof made by the officer. (Bouvier’s, Burrill’s, Black’s & Anderson’s Law Dict. tit. Acknowledgment. Statutory Construction Act, L. 1892, ch. 677, § 15.) An instrument is not “ duly acknowledged ” unless there is not only the oral acknowledgment but the written certificate also, as required by the statutes regulating the subject. (1 R. S. 759, § 15; L. 1848, ch. 195; L. 1863, ch. 246; L. 1865, ch. 421 ; L. 1870, ch. 208; L. 1896, ch. 547, §§ 255 and 258.) The provision requiring every general assignment to be recorded implies that the acknowledgment is to be made and certified in the same way that deeds and instruments of like character are acknowledged before they can be recorded. (Code Civil Pro. § 935.) We think that a written acknowledgment, adequate to meet the requirements of the statutes relating to the subject, is a prerequisite to the passing of title to property covered by a general assignment for the benefit of creditors. ( Warner v. Jaffray, 96 N. Y. 248, 252; Smith v. Boyd, 101 N. Y. 472; Scott v. Mills, 115 N. Y. 376, 380; Franey v. Smith, 125 N. Y. 44, 49; Albany Fire Ins. Co. v. Bay, 4 N. Y. 9, 19; Elwood v. Klock, 13 Barb. 50; 2 Cowen & Hill’s Notes, 1247, note 874.)

Ro question is raised as to the sufficiency of the acknowledgment by Asa L. Rogers, as assignee, but that is quite different from his acknowledgment as the official representative of the assignor, for the latter was the act of the corporation itself. As the venue of that acknowledgment was in this state it is presumed upon its face to have been taken in this state, for the main function of a venue to an acknowledgment is to show where it was made. (Thompson v. Burhans, 61 N. Y. 52, 63.) As was said in the case last cited, “ Every affidavit should show on its face that it was taken within the jurisdiction of the officer who certifies it.” The same rule should be applied to acknowledgments, and it was so applied in Vincent v. People (5 Parker’s Cr. Rep. 88, 101). (See, also, People ex rel. Crawford v. De Camp, 12 Hun, 378; Saril v. Payne, 24 N. Y. S. R. 486; Cook v. Staats, 18 Barb. 407; Lane v. Morse, 6 How. Pr. 394; Montag v. Linn, 19 Ill. 399.)

If, however, the acknowledgment in question was taken in this state, it was of no effect, because it was taken by a “ master in chancery of Hew Jersey,” an officer who has no power to act in the state of Hew York. In order to meet this difficulty, the plaintiff, himself, testified, without objection, that the acknowledgment was in fact taken in Jersey City, Hew Jersey. Thus, we have the official certificate naming one state and the testimony of an interested witness naming another state as the place where the acknowledgment was taken. As the venue is a part of the certificate, a question of fact was thus raised according to our decision in Albany County Savings Bank v. McCarty (149 N. Y. 71), where we held that a certificate alone, although not conclusive, is sufficient to make a case for the jury against evidence in rebuttal, whatever it may be. This question of fact has not been decided, although the learned counsel for the defendants asked “ to go tó the jury upon the question whether this acknowledgment was taken in Hew York or in Hew Jersey.” Ho question was submitted to the jury, for the court directed a verdict in favor of the plaintiff, but retained control of the case by consent of both parties for the purpose of further consideration, and under a stipulation authorizing the trial judge, in case he decided to grant the motion of the defendants for a new trial on the minutes, to either dismiss the complaint or direct a verdict for the defendants, with the same force and effect as if made at the proper time during the trial, subject to the plaintiff’s right to except. After holding the case from Hovember, 1894, until February, 1895, he granted the defendants’ motion for a new trial and dismissed the complaint. Obviously, this did away with the verdict, although the order does not so state in express terms. Hecessarily, however, that result follows by implication from the provisions of the order, for not only was a new trial granted, but the complaint was dismissed. The stipulation of the plaintiff did not authorize the court, either expressly or impliedly, to decide any question of fact, and the court neither made findings nor intimated in its order that it had passed upon any question of fact. The consent of the plaintiff, that if the defendants’ motion for a new trial should be granted, the court might either dismiss the complaint or direct a verdict for the defendants, cannot be construed to embrace any action by the court except such as is specified in the stipulation itself. The court did not direct a verdict for the defendants, and it could not have done so for the jury had been discharged, but it granted the motion for a new trial and dismissed the complaint. Such action, under the circumstances, must be regarded simply as a nonsuit, and not as a decision of the facts in favor of either party, as the Code does not permit a judge to decide questions of fact without findings in writing, general or special, or by directing a verdict, upon the motion of both parties. While the order is inconsistent, in that it both grants a new trial and at the same time dismisses the complaint, still the necessary result is that there was a nonsuit or a mistrial, and, we think, from the form of the order and the stipulation of the parties, that a nonsuit was intended. It follows that a new trial is necessary, for the courts have proceeded to judgment thus far without any decision of the question of fact as to where the assignment was acknowledged. While the defendants, only, requested to go to the jury upon this question, the plaintiff, by excepting to the decision dismissing the complaint in accordance with the right to so except, expressly reserved at the trial, may now properly claim error from the failure to submit that or any other question of fact raised by the evidence to the jury.

We do not announce our conclusion as to any of the other questions discussed by counsel, as, we think, for the reasons already given, that a new trial must be granted in any event.

The judgment should be reversed and a new trial granted, with costs to abide the event.

All concur.

Judgment reversed.