Case ID: ny-super-ct_49/html/0346-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Sedgwick, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GEORGE H. SEELEY, Appellant, v. JAMES MORGAN, et al., Respondents.
    
      Corporation.—Ultra vires.—Estoppel, by receipt of consideration.—Evidence.—- * Presumption as to execution of instrument.
    
    For the purposes of a suit against a third party upon a chose in action held by plaintiff as transferee from a corporation, it is enough if plaintiff prove an existing transfer, which¡ as against the corporation, vested him with title at the time of delivery or thereafter, though the corporation, its stockholders, or creditors may have had rights that would enable them to avoid or annul such transfer.
    Such an assignment which recites the receipt by the corporation of “ valuable considerations,” and is executed by the treasurer in the name of the company with'the corporate seal, and duly proved by a commissioner’s certificate, cannot be excluded, on the ground that the evidence shows lack of authority in the treasurer to act for the corporation, there being no proof that the corporation had disaffirmed his act, or offered to return the consideration, or that plaintiff knew of any informality or irregularity in the execution of the transfer.
    In such a case, the seal and the treasurer’s signature are pi'imafaeie evidence of execution by proper authority, and there is a further presumption from the seal and the recitals, that the company received “ valuable consideration,” retention of which operates to estop it, as well as a defendant sued under such transfer, from asserting that it was invalid or had not been made. Nor can the transfer be attacked on the ground that in its execution the provisions of the by-laws and the statute under which the corporation was formed, regulating the manner of transacting its business, were infringed.
    It seems that a formal resolution of the directors made after the action upon such assignment is begun, ratifying the act of the treasurer in executing it, is sufficient proof of the existence of an assignment at the time of the beginning of the action. In any event it is admissible as evidence of an actual acquiescence in and ratification of such act before the action.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.
    
      Decided December 3, 1883.
    Appeal by plaintiff from j ndgment entered on report of referee dismissing the complaint.
    The action was for alleged equitable cause. The plaintiff sought to enforce a cause of action in a Massachusetts corporation assigned to him. He gave facts tending to prove the cause of action, and to show that it had been assigned to him he offered in evidence a written transfer signed in the name of the corporation, by its treasurer, with the corporate seal affixed. The referee refused to receive it in evidence, on the ground that it conclusively appeared by the testimony that the person filling the office of treasurer-had no authority to sign the name of the company or to affix its seal. The complaint was dismissed solely on this ground. Further facts appear in the opinion.
    Stafford, Graff & Roman, for appellant.
    —I. As the instrument complied with the statutory requisites for documentary proof, it was plaintiff’s absolute right that it should be admitted in evidence, (a) The statute is that when an instrument is acknowledged or proved as a conveyance of real property must be for record, “ thereupon it is evidence.” (Code Civ. Pro. § 937). (b) Considering other evidence in order to determine the admissibility of this documentary evidence was error. It was a manifest and utter confounding of the question of admissibility of evidence and of the question of the effect of evidence. The assignment was clearly admissible, and its exclusion was a legal error for which the judgment should be reversed (C. B. & Q. R. Co. v. Lewis, 52 Iowa, 109-12).
    II. Plaintiff having produced an assignment of the cause of action valid on its face, the defendants could raise no further question as to its validity, nor raise the question that the assignment was not authorized by the corporation (Flint v. Craig, 59 Barb. 332; Eno v. Crooke, 10 N. Y. 66; City Bank of N. H. v. Perkins, 29 Id. 566; Castle v. Lewis, 78 Id. 134).
    Passing from an assignment of this character, made under these precise circumstances, to the general subject of a written assignment of a cause of action, the authorities uniformly hold that the production of such an assignment gives the plaintiff a perfect and absolute right to maintain the suit, and bars all further inquiry on that point (Stone v. Frost, 61 N. Y. 614; Sheridan v. The Mayor, 68 lb. 30).
    
      III. The validity of the written assignment offered in evidence is in no wise affected by statutes or by-laws prescribing methods of formalities of corporate action. (a) Statute or charter provisions, prescribing methods of corporate action merely, confer no rights upon individuals (Eaton v. Aspinwall, 19 N. Y. 121 ; M. E. U. Church v. Pickett, 19 Id. 485-6; Trustees of V. S. v. Hills, 6 Cow. 23; Brower v. Appleby, 1 San. 158; Stafford v. Wyckoff, 4 Hill, 442; Barnes v. Ontario B’k, 19 N. Y. 152; Morawetz's Private Corporations, § 48; Angell & Ames on Corp. § 253; Boone on Corp. § 99). (b) By-laws of a corporation have no force or effect except between the officers and stockholders. They do not affect the rights of third parties in their transactions with the corporation had in the ordinary and usual way of business among individuals in similar transactions (Morawetz Priv. Corps. §§ 46 and 370; Boone Law of Corp. § 59; Angell & Ames on Corp. § 325; Driscoll v. W. B. &c. M. Co., 59 N. Y. 109; Mechanics’ & Farmers’ Bank v. Smith, 19 Johns. 123; State v. Overton, 24 N. J. L. 440). (c) It will be conceded that it is a much graver offence for a corporation to enter into a contract which it has no power to make than it is to omit prescribed formalities in making a contract which it has a right to make ; and yet, rights of the parties to it will be enforced, and such a violation of laV can be invoked against the corporation only by the state in an action to dissolve the corporation (Angell & Ames on Corp. §§ 152-3; Morawetz's Priv. Corp. §§ 118-19; Boone on Corpor. §§ 99-101; Kent v. Quicksilver Mining Co., 78 N. Y. 159; Whitney Arms Co. v. Barlow, 63 Id. 62; Groundie v. N. W. Co., 7 Pa. St. 233; Grant v. Henry Clay C. Co., 80 Id. 208; Natoma Water Co. v. Clarkin, 14 Cal. 552; Union W. Co. v. Murphy, F. Co., 22 Cal. 630; Chambers v. City of St. Louis, 29 Mo. 543; Martindale v. K. C. & St. J. R. Co., 60 Mo. 508; C. B. & Q. R. Co. v. Lewis, 53 Iowa, 113).
    IV. One who deals with a corporation is not held to a knowledge of statutes or by-laws prescribing the formalities of its action, and is not bound to see that they are complied with (Smith v. Smith, 62 Ill. 497).
    V. A formal resolution of the board of directors authorizing the execution of the assignment was not necessary to render the assignment valid (Conover v. Mutual Ins. Co., 1 N. Y. 292; Hoag v. Lamont, 60 Id. 101; Bank of Middlebury v. R. & W. R. R. Co., 40 Vt. 160; Kelsey v. Nat’l B’k of Crawford Co., 69 Pa. 430). Even if there had been no legally constituted board of directors who could formally authorize an officer to execute the assignment, its execution by him would be valid and would bind the corporation (Castle v. Lewis, 78 N. Y. 134; Sherman v. Fitch, 98 Mass. 64).
    VI. The assignment is valid. Its execution was authorized. (a) It has upon its face all the indicia of being an authorized and valid assignment. It recites that “ the Tournaphone Music Company hereby sells, assigns and transfers to George H. Seeley,” &c. “In witness whereof the said The Tournaphone Music Company, by its treasurer, F. L. Faulkner, has hereunto set its hand and seal.” These recitals raise the presumption that the document was made by the corporation (Trustees v. McCechnie, 90 N. Y. 628-9; N. E. Iron Co. v. G. El. R. Co. 91 Ib. 162-4). It has the seal of the corporation affixed and the presence of the seal alone, without a signature is a sufficient execution by the corporation. Clark v. Farmers’ Mfg, Co., 15 Wend. 258; Union Bridge Co. v. T. & L. R. R. Co., 7 Lans. 244). The presence of the seal is prima facie evidence that it was affixed by proper authority (Trustees v. McCechnie, 90 N. Y. 629). The seal was affixed by the officer who had the custody of it and who was therefore presumptively authorized to affix it. The corporate name being signed by an officer of the corporation, the assignment would be valid and binding without a seal (Angell & Ames on Corp. § 219, 228; Morawetz Priv. Corp. § 167; Boone Law of Corp. §§ 44, 101.) The term “written contracts,” in the by-laws does not apply to the assignment in question in this case (N. E. Ins. Co. v. De Wolf, 8 Pick. 56; Sanborn v. Fireman’s Ins. Co., 16 Gray, 448; Merchants’ Bk. v. Bank of Columbia, 5 Wheal. 326; Barnes v. Ontario Bank, 19 N. Y. 152). Making the assignment was a transaction falling within the scope of the ordinary duties and powers of the treasurer of the corporation (Hoyt v. Thompson, 5 N. Y. 354). A single officer of a corporation may direct the institution of a • suit in its name and behalf (Am. Ins. Co. v. Oakley, 9 Paige, 496). The assignment may have been made simply as means of instituting a suit in the courts of this state, and this is permissible and legal (Peterson v. Chemical Bank, 32 N. Y. 21). If it be true that two of the directors had resigned, so that at the time the assignment was executed there were but two directors, while the law required three and the by-laws four, this would not deprive the corporation of power to act (Sherman v. Fitch, 84 Mass. 64; Castle v. Lewis, 78 N. Y. 133-5; Smith v. Smith, 62 Ill. 496).
    VII. If the assignment had not been authorized prior to its execution it would have become authorized by ratification. (a) The assignment would be ratified by the failure to repudiate it since its execution became known, which is an admission that its execution was authorized (Angell & Ames on Corp. § 304; Morawetz Priv. Corp. § 304; Boone Law of Corp. § 104; Kent v. Quicksilver Mining Co., 78 N. Y. 184; S. H. B. Co. v. E. H. B. M. Co., 90 Id. 613; Sherman v. Fitch, 98 Mass. 59; Kelsey v. National Bank, 69 Pa. 426). (b) The assignment was formally ratified both by the stockholders and by the directors of the Tournaphone Music Company, May 10, 1883. The assignment was not rejected by the referee as invalid till June 8, 1883. v The referee is therefore in error when he says that this formal ratification did not take place until after he had excluded the assignment. The' formal ratification was not proved until the referee had once refused to admit it without such proof ; but when he held such proof necessary, it was furnished, and the assignment was then offered again but was still rejected, (c) Ratification is equivalent to prior authorization (S. H. B. Co. v. E. H. B. M. Co., 90 N. 
      
      Y. 613; Sherman v. Fitch, 98 Mass. 64; Story on Agency, § 244; Wharton on Agency, § 75; Broom’s Legal Maxims, 867; Angell & Ames on Corp. § 304; Morawetz Private Cory. § 78). (d) It is true that ratification cannot operate retroactively so as to divest rights that have become vested in third parties intermediate the ratification and the act. But the defendants’ interest in the subject matter of the transaction ratified is only of that indirect and incidental nature which the retroactive effect of ratification always disregards (Story on Agency, § 248; Wharton on Agency, §§ 80-1; Phillips v. Campbell, 43 N. Y. 271; Morris v. Shulter, 1 Mackey [D. C.) 201).
    
    
      E. S. Babcock, Q. McAdam, and H. T. Ketcham, for respondents.
    —I. The defendants are entitled to competent evidence of plaintiff’s alleged ownership of the cause "of action, or to a dismissal, because they are entitled to due proof of every issuable allegation on which they join issue, and because in respect of plaintiff’s title they are now expressly authorized by law to raise the defense that he is not the real party in interest, and because they are entitled, if defeated, to a judgment which will protect them from another action for the same cause by any other party (Hays v. Hathorne, 74 N. Y. 486). The plaintiff below argued that his title “was none of the defendants’ business” unless they could show actual mala fides in the assignment or notice thereof, and cited City Bank of New Haven v. Perkins (29 N. Y. 554). The court, from which that case proceeded, have repeatedly criticised as obiter the passages in their former opinion, from which the plaintiff seeks aid, and have stripped it of the significance suggested by plaintiff (Sanford v. Sanford, 45 N. Y. 727; Hays v. Hathorne, 74 Ib. 489).
    II. The transaction sought to be proved by the paper offered on the trial was not in the ordinary course of the business of plaintiff’s alleged assignor, nor had it been sanctioned by any custom or previous course of dealing on . the part of that corporation. That which was attempted to be sold was its capital property, and the sale was tantamount to corporate suicide, and would be set aside at the suit of a dissenting stockholder (Abbott v. Hard Rubber Co., 11 Abb. Pr. 205-206, aff’d 33 Barb. 578).
    III. On its face the paper when offered was not evidence of the alleged assignment, for it failed to show corporate authority for its execution, the only proof of execution being that contained in the commissioner’s certificate, which states the contents of the deposition made by the “subscribing witness”—i.e., the treasurer who executed the paper—before him, and this fails to show either that the corporation or the board of directors authorized the execution. It says only, “ being authorized so to do by the directors of said corporation.” Though the presence and proof of the seal does under some decisions raise a presumption of authority, yet it is always open to rebuttal, and like any presumption which may be rebutted at all, falls to the ground the moment the fact is shown by direct evidence.
    IV. Before the paper was offered plaintiff had proved that from the organization of the corporation to a period long after the commencement of the trial, the corporation had not authorized this act at any stockholders’ meeting; that it had never authorized it at any directors’ meeting ; and that at the time it purports to be made, December 2, 1882, the corporation had no board of directors, and had had none from October 27, 1882, up to a period long after the commencement of the trial, thus destroying the presumption raised by the proof of the corporate seal. In a case quite like that before the court, the court held, against the statutory proof of the document, that it could not be an act authorized by the board of directors, 1 ‘ because there was no meeting of the board for that purpose” (Murray v. Vanderbilt, 39 Barb. 140).
    , V. The supposed assignment was imperfect and ineffective, for the further reason that it ,was not signed by the ■president and treasurer of the company, as required by the Lby-laws. A body corporate can act only in the mode prescribed by the law creating it. To enable its agents to bind the corporation they must act in pursuance of the provisions of the act of incorporation (Beatty v. Marine Ins. Co., 2 Johns. 109; People v. Utica Ins. Co., 15 Ib. 358; N. Y. Fire Ins. Co. v. Ely, 2 Cow. 678; Hosack v. College of Physicians, &c., 5 Wend. 547). And a by-law adopted in accordance with the law of the State has all the force of a statute (Presb. Church v. City of N. Y., 5 Cow. 538; Stuyvesant v. Mayor, &c., 7 ld. 588; McDermott v. Board of Police, 5 Abb. Pr. 422).
    VI. The attempted “ratification” at a meeting of the Tournaphone Co. and its directors, held during the trial and after the paper had been twice rejected in court does, not aid the plaintiff. The retroactive effect of subsequent ratification cannot be applied to the prejudice of those who-are strangers to the transaction, nor especially so as to impair their rights after suit brought (Dunlap's Paley, 191; Story Agency, §§ 245-246; Evans Agency, 74, [Am. Ed.] 99, note). Defendants must have the right when notified by the suit of plaintiffs’ claim to shape their course by the facts as they exist then. It would be very unjust to compel them to accede to an unlawful claim, because a third party might make it good thereafter by the retroactive effect of a ratification (Lord Ellenborough, in Right. dem. Fisher v. Cuthill, 5 East, 496, followed in Doe dem. Mann v. Walters, 10 Barn. & Cr. 634). The rights of the parties should be determined as they exist at the commencement of the action (N. Y. Shot & Lead Co. v. Carey., 10 Abb. Pr. 44-46). And see Hare v. Van Deusen (32 Barb. 92); Wattson v. Thibon (17 Abb. Pr. 174); Tiffany v. Bowerman (2 Hun, 643); McCullough v. Colby (4 Bos. 603).
   By the Court.—Sedgwick, Ch. J.

—The answer of one of the defendants denies that the alleged claim and rights of the Tournaphone Music Company mentioned in the complaint, have been duly or otherwise assigned to the plaintiff, and denies that the plaintiff is the owner of the said claim and rights or any of them. The answers of the other defendants make the same denials, and aver “that the plaintiff herein is not the real party in interest, but that the Tournaphone Music Company in the complaint mentioned is the real party in interest,” one of the answers averring “ that the action in truth is prosecuted by and in the interest, and on behalf of the Tournaphone Music Company . . . which company is the real, and ought to 'be the nominal plaintiff herein.” The learned referee, in his able opinion, expressed regret in having been obliged to exclude the paper presented by the plaintiffs as an assignment, because he was satisfied that the plaintiff had been able to make a prima facie cause of action in respect to the other matters charged. On the point on which his decision turned, I do not think it would have been inadmissible for him to have inquired, after the assignment presumptively had been proved, as to the bearing of an averment in the answers that the company which made the assignment was the real party in interest. Such a position possibly may imply that the pleader knew that the company, as a corporation, executed the paper in fact, but executed it for its own, and not for the transferee’s benefit. As, however, one of the answers did not contain such a position, no further reference will be made to this matter.

I do not doubt that unless the"plaintiffs could show that the company transferred its rights to them, he would have no cause of action, nor that the defendants could interpose all legal objections to the manner of proving this, or to the sufficiency of the testimony to prove it. After sufficient proof had been given to show that the transfer had been made, I am of opinion that the defendants could raise no further question. When once the transfer was perfected, although the corporation itself, the stockholders, or the creditors, might invalidate it for cause, the defendants could not. These propositions do not involve a denial that the defendants may rely for the purpose of showing that the transfer was not made by the company, upon some ground that would also invalidate it after it had been made, but they are confined to the former purpose. The cases of Hays v. Hathorn (74 N. Y. 486), and Sanford v. Sanford (45 lb. 723), in their allusions to the City Bank of Newhaven v. Perkins (29 Ib. 554), affect it only so far as any attempt might be made to consider it as authority for a proposition that a defendant, if he raised the issue, might not contest an allegation that the plaintiff was the transferee of the right on Which he brought the action as transferee. The law was recognized to be, that if the legal title was in the plaintiff, all methods of assailing the transfer were unavailing to a defendant situated as the present defendants. Sheridan v. Mayor (68 N. Y. 30), was cited with other cases to sustain this. The matter is clear in the case of a transferor who is a natural person. It becomes complicated sometimes when the plaintiff claims to be the assignee of a corporation. The only question then that the defendants could raise was whether the paper in proof was a transfer which, as against the corporation, vested title in the plaintiff at the time of delivery, or at any subsequent time. For the purposes of this action, the transfer would be sufficient even though the corporation might have had rights that would enable it to avoid the transfer or to succeed in an action to annul it if the corporation had not exercised such rights. The plaintiff was entitled to the benefit of the transfer if it were not altogether void against the corporation up to the time that the present action was begun.

The case involves the following facts : On the trial the plaintiff offered in evidence a paper purporting to be a transfer by the corporation of certain rights of action, among which was the present right of action. The referee held that there was sufficient proof of its execution in the commissioners certificate attached to it. The case requires us to assume that the seal which made the impression upon the paper was the corporate seal. On the face of the paper F. L. Faulkner appeared to have signed for the company as treasurer and to have affixed the seal. The referee, however, refused to receive it in evidence, on the ground that the testimony in the case showed that F. L. Faulkner had no authority from the company to sign for it or to affix its seal, and therefore it was not a transfer by the company. The result was a dismissal of the complaint on this ground.

I am of opinion, that if the paper had been received in evidence, it would not have conclusively appeared that the plaintiff was not the transferee of the company. The decision made, in my judgment, failed to give full effect to the presumptions from the actual execution of the paper, and to the rules of law that bind corporations by estoppel. In Trustees Can. Academy v. McKechnie (90 N. Y. 618), it was objected that it did not appear that the person signing as president had been authorized to execute the mortgage. The court said, quoting section 224 of Angell & Ames on Corporations, that: “Where the common seal, of a corporation appears to be affixed to an instrument, and the signatures of the proper officers are proved, courts are to presume that the officers did not exceed their authority, and the seal itself is prima facie evidence that it was affixed by proper authority.” “The certificate of the acknowledgment of a deed is received without proo’f of the official character of the officer presenting it. The contrary must be shown by the objecting party.” The paper thus being properly in evidence, there would be the further presumption from the seal and the statement of the paper that the corporation, as a corporation, had received the “other valuable considerations” for which the transfer was made, which were in value as great as the thing transferred. This being a presumption against the corporation, it extends to a knowledge of the facts on the part of all having power to act, for the corporation in affirming or disaffirming anything alleged to have been done by an officer without authority. There would be no presumption that the individual who acted for the corporation, and received the considerations retained them personally, but the presumption would be that they went to corporate uses. It is further to be considered that all the officers and all beneficially interested in the corporate affairs, were witnesses in the case. Their testimony is not given, but as the transfer should have been received in evidence, unless the evidence otherwise affirmatively showed that it was not the act of the company, it ought to be taken that none of them disaffirmed the transfer. Particular attention will be given to the proof of formal ratification after the action begun. There was no proof that the corporation had returned or offered to return the consideration received by it, nor that the plaintiff knew of any irregularity or .want of formality, in what occurred before the execution of the document.

On account of these facts, the corporation, by the laws of this state was estopped from asserting that the' transfer was not valid or had not been made. In Whitney Arms Co. v. Barlow (63 N. Y. 62) the following principles are announced: It is now very well settled, that a corporation cannot avail itself of the defense of ultra vires, when the contract has been, in good faith, fully performed by the other party and the corporation has had the full benefit of the performance and of the contract. If an action cannot be brought directly upon the agreement, either equity will grant relief, or an action in some other form will prevail. The same rule holds if the other party has had the benefit of a contract fully performed, he will not be heard to object that the qontract and performance were not within the legitimate power of the corporation.” The case approves the opinion of Comstock, Ch. J., in Parish v. Wheeler, (22 N. Y. 494), "That the executed dealing of corporations must be allowed to stand for and against both parties, where the plainest rules of good faith require.”

' Upon a corporation coming into existence, besides the special laws of its creation and mode of action, it is the subject of the general law of the land, and therefore bound by equitable obligations. If it receive and use a consideration paid, that affirms the transaction in which it was paid, the corporation is estopped from going into other matters of power, regularity, etc. (Scott v. Middletown R. R. Co., 86 N. Y. 200; Sheldon H. B. Co. v. Eickemeyer H. B. M. Co., 90 N. Y. 607).

Without holding that the various objections, taken to the validity of the transfer would be sound, in behalf of the company, if it were not for these considerations, it must be held that, in view of them, the corporation could not raise the objections. It was argued that the foreign statute under which the corporation was formed made it incapable of authorizing the transfer, as that statute required that the business of the corporation should be done by at least three directors, whereas, at the time, there were but two directors ; that the by-laws required that the business should be done by four directors, three-fourths of whom should constitute a quorum ; that the by-laws directed that all contracts of a certain kind should be executed by the president and treasurer; that no direction was given by such directors as these were, that the transfer should be made. These matters were immaterial, inasmuch as the transfer bound the company by force of equitable principles which was not impaired by any of these matters, and the company would be estopped from setting them up.

Hoyt v. Thompson (5 N. Y. 320), illustrates the position, that has been taken. ' In it, it was held that the act of certain officers in affixing the seal of the company, was unauthorized, according to the averments of the bill which had been demurred to. The case was one where the transfer had been made as collateral- security for an antecedent debt. Judge Paige specifically referred to this, in saying, “But inasmuch, as the state of Michigan received the .assignments as collateral security merely for an antecedent debt, the Merced Canal and Banking Company, or its representatives, are not estopped from denying the authority of its president and cashier to execute and deliver the assignment. In a subsequent appeal, after trial on issue of fact (Hoyt v. Thompson’s ex’rs., 19 N. Y. 207), Judge Comstock held that the corporation, like an individual, might ratify the acts i of its agents done in excess of their authority, and that | such ratification might in many cases be inferred from an (informal acquiescence in and approval of these acts.

In Murray v. Vanderbilt (39 Barb. 140), Judge Ingraham examined the facts to ascertain whether the presumption from the seal being affixed had been rebutted. This one conclusive fact appeared, the seal had been attached to a press, and they having been sold by the sheriff, were bought in by Mr. Cross, who afterwards signed as president, and affixed the seal. There were other important facts, but it clearly appeared that there had been no re-adoption or use of the seal by the company. The assignment was not made upon consideration received by the corporation.

In Moore v. Rector, &c. of St. Thomas (4 Abb. N. C. 51), the narrowest case was made for the decision of the court. Judge Gilbert says, in his opinion, that the only authority claimed “was derived from a resolution recorded in the minutes of a meeting of the vestry. There were but four vestrymen at the meeting. The act of incorporation said, that no board of trustees should be competent to transact any business unless a majority of vestrymen were present. In the case five vestrymen were required to make a majority. Of course the facts of the case disposed of the presumption on the ground which the parties selected to rely upon.

After the referee had made the decision which has been reviewed, the plaintiff offered to give in evidence a formal resolution of the board of directors of the corporation, made after the action was begun, and which ratified the act of Faulkner in executing for the company the transfer. The proposed evidence was excluded on the ground that if it was not a valid assignment when first offered in evidence, it could not during the progress of the trial be ratified so as to give it retroactive effect as between the litigants in this action without their assent thereto. I am of opinion, however, that however cumulative such a ratification might be, under the facts as they were, yet that it was, in connection with the other facts, some evidence as to whether or not there had not been before the beginning of the action an actual acquiescence and ratification afterwards put in the formal shape of a resolution.

My personal opinion is, that the resolution would have ' been of itself sufficient and competent proof of an assignment at the beginning of the action. It was only evidence, and would not have called for a supplemental complaint. And on the facts of this case, I do not perceive that between the time of the assignment and the formal act of ratification there had been anything involved in the issues which conferred at the time, on the defendants, any right which would have made it unlawful or inequitable to give full force to the retroactive effect of a ratification. I prefer not to make a decision on this ground, as it would require the examination of several cases, such as Tiffany v. Bowerman (2 Hun, 643); McCullough v. Colby (4 Bosw. 603); Gilbert v. Sharp (2 Lans. 412); Bliss v. Cattle (32 B. 325); Gorham v. Gale (7 Con. 739), and this seems not to be necessary in view of the other facts.

The judgment should be reversed with costs, new trial ordered, and the order of reference vacated.

Freedman and O’Gorman, JJ., concurred.