and that the service of notice of intention to sue not having been made until December 29, 1904, was not made within six months after the cause of action had accrued. Plaintiff contends that his cause of action did not accrue until 30 days after his claim was filed with the comptroller, as required by section 261 of the Greater New York Charter, to wit, until October 2, 1904. It is indisputable that in the case at bar section 261 of the charter prevented the commencement of the action until October 2, 1904, and made the allegation of a compliance with that section an essential part of the complaint. Section 415 of the Code of Civil Procedure provides that the limitations "must be computed from the time of the accruing of the right to relief by action, special proceeding, defense or otherwise, as the case requires, to the time when the claim to that relief is actually interposed by the party, as a plaintiff or defendant, in the particular action or special proceeding." This provision was held by a majority of the court in Crapo v. City of Syracuse, 183 N. Y. 400, 76 N. E. 466, to mean that the cause of action did not accrue in an action for damages for death of a decedent until the appointment of an administrator, and the limitation began to run only from the time of such appointment; in other words, that the limitation did not attach until there was some person in being who could exercise immediately the right to commence an action. The self-evident purpose of a time limitation is to require a person who seeks relief by action to do so within a given time after his unrestricted right to bring the action accrues. The frequent use of the expression "when the cause of action accrues," in the statutes and decisions, gives rise to much confusion. In Webber v. Herkimer & Mohawk St. R. Co., 109 N. Y. 316, 16 N. E. 360, the court says:

"In the case at bar the cause of action arose complete when the injury occurred to plaintiff, limitations commenced to run at that time."

and was perfect and and the statutory

This was quite true, but it will be observed that in that case the question for the construction of the court was whether the nature of the case brought it within the three-year statute or otherwise. The plaintiff therein was free to sue the very day the circumstance complained of transpired, and was not retarded or restrained by any statutory provision requiring the performance of any condition. The plaintiff herein could not commence his suit until October 2, 1904, and, as he served his notice of intention to sue within six months thereof, I am of the opinion that he did so within the meaning of chapter 572, p. 801, Laws 1886, which requires service of such notice "within six months after such cause of action shall have accrued." I have examined carefully all the cases cited by counsel for defendant, but do not find that the principle therein laid down conflicts with the conclusion. Motion to dismiss denied.

Motion denied.

(55 Misc. Rep. 110.)

and 140 New York State Reporter

GAUSE V. COMMONWEALTH TRUST CO.

(Supreme Court, Trial Term, New York County. June, 1907.)

1. BANKS AND BANKING-TRUST COMPANIES-ULTRA VIRES CONTRACTS.

A trust company was organized under Laws 1892, p. 1842, c. 689. Its vice president, with the consent of its president, but without the knowledge of its directors, signed an instrument under seal, in the name of the corporation, guaranteeing to the owner of certain bonds and stocks the sale thereof before a certain date at not less than a certain sum. The trust company at the time owned no bond or stock of such corporation, nor was it interested in the sale of its securities, otherwise than by the commission it might acquire. Held, that the contract was ultra vires.

2. SAME-AUTHORITY OF OFFICER.

The right of a trust company to guarantee a sale of certain stock and bonds at a specified price within a certain time being questionable, the holder of the stock was put on inquiry as to the authority of an officer of the trust company to execute a guaranty of that nature on behalf of the company.

8. SAME-ENForcement-PerFORMANCE BY OTHER PARTY.

Where a trust company guaranteed to plaintiff to sell certain stocks and bonds for him at a certain time at a fixed price, but there was no delivery to defendant of such securities, there was no such performance by plaintiff as entitled him to recover on the ground that the contract of a corporation will be enforced, where the corporation has received the full benefit thereof, though it be ultra vires.

Action by Harry S. Gause against the Commonwealth Trust Company. Complaint dismissed.

Howard A. Taylor, for plaintiff.

D. Cady Herrick, for defendant.

GREENBAUM, J. The alleged contract upon which plaintiff seeks to hold the defendant liable for damages is set forth in Gause v. Commonwealth Trust Co., 111 App. Div. 530, 97 N. Y. Supp. 1091. The testimony is uncontradicted that the vice president of the defendant corporation, with the consent of its president, but without the knowledge or authority of the board of directors or its other officers, signed the paper writing in question in the name of the corporation and affixed thereto its corporate seal. The meaning of the instrument, if valid, was to guarantee the plaintiff, who was the owner of certain bonds and stocks of the United States Shipbuilding Company, the sale, on or before August 23, 1903, of said securities at not less than certain specified prices, whether such sale was effected through the efforts of the syndicate therein referred to or otherwise. The defendant was organized as a trust company under chapter 689, p. 1842, of the Laws of 1892, known as the "Banking Law." The obligation ostensibly assumed by the defendant was in itself clearly one outside of its purview, scope, or power. The transaction did not constitute a purchase of securities. The defendant was not even to profit by a sale of the securities above the figures mentioned, but any sum that might be realized above these figures was also to belong to the plaintiff. The only conceivable advantages accruing to the defendant by the execution of the contract were the commissions it might earn and the prestige as a new company it might acquire in being connected with the underwriting of

the securities of the shipbuilding company, then believed to be a conspicuous, important, and likely successful corporate enterprise, and in acting as its transfer agent and registrar. It does not appear that the defendant corporation, when its vice president signed the alleged contract, owned any of the bonds or stocks of the United States Shipbuilding Company, nor that it was interested in the advantageous sale of its securities, otherwise than as already mentioned.

It may be stated here that plaintiff contends that the defendant was deeply concerned in upholding the values of the shipbuilding securities, because of its indorsements or guaranties of certain large loans made to certain individuals by the National Park Bank and other banks upon the bonds and stocks of the United States Shipbuilding Company. One of these individuals was Mr. Dresser, the then president of the defendant trust company. The guaranties in question were made by the president under circumstances that would indicate that he failed to realize that he was a trustee charged with the execution of an important trust. He apparently treated the trust company as though it were his own individual property. No express or implied authorization to guarantee to other corporations loans made by them existed. A resolution appears in the minutes of the executive committee of the defendant under date of September 9, 1902, to the effect that the president is authorized “to make or guarantee loans in the company's name when necessary." Three members of the executive committee were recorded as present at this meeting, to wit: Mr. Dresser, the president, and Messrs. Wetmore and Greig. The minutes of the meeting of September 9th were apparently never approved of, and were not read until a subsequent meeting of the committee held on October 10, 1902, when action with reference to the minutes was deferred, owing to the objection of Mr. Wetmore that "he did not vote for the adoption of the resolution of guaranty:" Upon the trial Mr. Wetmore testified that such a resolution "was never adopted." Apparently the guaranties had been made prior to September 9th. No knowledge of them had come to the board of directors until some time subsequently, and under the authorities, as I understand them, the guaranties, whether authorized or not, and in this case founded upon no consideration flowing to the defendant, were clearly ultra vires. Appleton v. Citizens' Bank, 116 App. Div. 404, 101 N. Y. Supp. 1027. The guaranties were also violations of the provisions of section 156 of the banking law that "no loans shall be made by any such corporation, directly or indirectly, to any director or officer thereof." The loans, being made to Dresser, the president of the defendant, come within the condemnation of this statute, in its spirit, if not its letter. Considering, too, the transactions in the light of the situation as it existed in August or September, 1902, when all concerned assumed that the shipbuilding securities held as collateral by the lending banks were valuable and ample to cover the loans, these alleged guaranties to the banks could not possibly have entered into the consideration of any of the parties when the alleged agreement in suit was executed. It was only later, when, possibly to avoid the disagreeable position of repudiating the acts of its president, an agreement, called the "Sheldon Syndicate Agreement," was entered into for the purpose of disposing of the hypothecated securities. Un

106 N.Y.S.-19

and 140 New York State Reporter

der this agreement, dated October 29, 1902, the trust company took the title to the securities to enable it to transfer the title to them to the syndicate managers, who were to dispose of them.

Coming, now, to the plaintiff's interests in the shipbuilding securities, it appears that he was very largely interested in one of the companies which had sold its assets to the shipbuilding company. In part payment of such sale the plaintiff had received the bonds and stocks of the shipbuilding company, which were the subject of the agreement in suit. He was aware of the fact that steps were being taken to effect a syndicate agreement looking to the pooling of all securities of the shipbuilding company, to the end that high prices may be realized in their sale. A form of syndicate agreement had been prepared, with the essential purpose and feature of which he was entirely in favor; his only objection to the proposed agreement being that he did not know Mr. Clarke, the manager named therein. He was willing, however, to enter into the pooling scheme, providing the defendant company became a party to the agreement. It is evident that, when the paper writing in suit was executed, the president and vice president of the defendant company had unbounded faith and confidence in the successful outcome of the syndicate agreement. Filled with the sanguine expectation that the shipbuilding securities would be sold at prices beyond those limited. in the agreement with plaintiff, the president and vice president recklessly involved the defendant corporation in the syndicate agreement. The anxiety of these two officers of the defendant to effectuate the pooling scheme may doubtless have been to some extent stimulated, whether consciously or unconsciously, by the circumstance that they' were also at that time directors of the United States Shipbuilding Company, and presumably owners of its stocks and bonds. To my mind the contract attempted to be enforced against the defendant was clearly ultra vires. Under its charter it had no power whatever to enter into such a contract. If it were the owner of a considerable quantity of the bonds and stocks of the shipbuilding company it might with some plausibility be argued that it had the right to enter into an agreement which might protect its own holdings in the company. Its relation to the shipbuilding bonds and stocks was, however, purely fiduciary, and any agreement of guaranty, as already shown, would be illegal. The right to guaranty being ordinarily beyond the powers of the defendant corporation, it would follow that plaintiff would be put upon his inquiry as to the authority of the president and vice president to execute the instrument in suit and the power of the defendant corporation to engage in such an undertaking. The foregoing rule is peculiarly applicable to plaintiff, who was in a position to fully appreciate the relations of the defendant to the shipbuilding company securities, and who fully understood the purposes of the syndicate agreement, and that the defendant then had no concern therein, except as trustee. Unless authority in the vice president and power in the corporation are established, or a state of facts shown which would bind the corporation on the theory of an estoppel, there can be no recovery. There is no proof that either the president or vice president had previously engaged in any transaction like that under consideration, or that they or either of them had been given such broad and general powers to

act in behalf of the defendant as to justify the inference of an implied authority to execute the alleged agreement. It is conclusively and convincingly established by affirmative proof that no express authority was conferred upon these officials, and as matter of fact the other directors had no knowledge of the existence of the instrument until months after it had been signed.

The plaintiff relies upon the well-recognized rule of law that the seal of a corporation affixed to a written instrument, to which it is a party and which is signed by one of its proper officers, is prima facie proof that it was attached by proper authority. Quackenbos v. Globe & Rutgers F. Ins. Co., 177 N. Y. 71, 72, 69 N. E. 223. Assuming that the defendant was put to its proof as to the authority of its president or vice president to execute the alleged agreement, it seems to be well settled that the presumption of authority which the seal imports may be conclusively rebutted. It has already been shown that, excepting for the seal, no state of facts has been established which would warrant the inference that the plaintiff was justified in assuming that the vice president had authority to act for the defendant. As matter of fact it was proved that there was no actual authority. We have thus a case where the corporate seal was affixed without authority, and where the validity of the instrument to which it was affixed may be assailed by the corporation. Hoyt v. Thompson, 5 N. Y. 320, 335; Moore v. Rector, 4 Abb. N. C. 51. A presumption of fact arising in favor of a party, conclusively overcome by uncontradicted proof introduced by the opposing party, ceases having any probative force. McDonald v. Metropolitan St. R. Co., 167 N. Y. 66, 70, 60 N. E. 282; Kramer v. Kramer, 181 N. Y. 477, 481, 74 N. E. 474. I might rest my decision upon the conclusion that the facts establish a lack of authority in the vice president or president of the defendant to execute the alleged agreement. It may be well, however, independently of this, to consider whether the defendant is estopped from interposing the plea of ultra vires by reason of plaintiff's performance of the contract under the rule followed in this state, but not recognized in the federal courts. Vought v. Eastern Bldg. & Loan Ass'n, 172 N. Y. 508, 518, 65 N. E. 496, 92 Am. St. Rep. 761.

One of the conditions of the contract was that the plaintiff was to deposit with the defendant the bonds and shares of stock of the United States Shipbuilding Company. The deposit as matter of fact was never made. It is true the plaintiff contends that he stood ready at all times to deposit them, and that the injury to him was as complete as though he had in fact deposited them. The cases in the Court of Appeals that have considered the doctrine of estoppel as applicable to a corporate plea of ultra vires are collated in the Vought Case, at page 518 of 172 N. Y., and page 496 of 65 N. E. (92 Am. St. Rep. 761). A study of these cases shows that a contract ultra vires will nevertheless be enforced where either the person with whom the corporation has contracted or the corporation itself has received the full benefit thereof. In this case the inquiry would therefore be: Was the contract executed by the plaintiff? It seems to me unnecessary to elaborate upon the answer to this question, in view of Jemison v. Citizens' S. Bank, 122 N. Y. 135, 25 N. E. 264, 9 L. R. A. 708, 19 Am. St. Rep.