Clark & F. 61, 68; BARRETT, J., in Powers | v. Skinner, 34 Vt. 274-285. The judge having found that the contract was legal, the fact that the plaintiff did things against public policy, if it be a fact, can be considered only as bearing, by way of illustration, upon the question whether the tendency of the contract necessarily was to induce the doing of such things. If that was its necessry tendency to an appreciable degree, it was void, whether it induced the acts or not.

it. But we cannot say that there was not some evidence of a legal contract. We cannot say, as matter of law, that the chairman of the committee of a political party cannot practice his profession-the law-in the city hall as well as in the courts. We cannot say that the contract appears, as matter of law, to have contemplated the use of improper influence, or necessarily to have tended to induce it. The words in which the contract is said to have been made did not disclose such a tendency on their face. The political position of the plaintiff and what was done are only evidence of what was expected, and are not conclusive that it was expected. What was done, moreover, was not necessarily improper, even in the particulars mentioned. We have not mentioned those services rendered which were not open to question. Exceptions overruled.

Co. 1

BAILMENT-SALE.

(119 N. Y. 334)

The judge was warranted in finding that a bilateral contract was made in this conversation; that the only services on the part of the plaintiff promised by him or contemplated by either party at that time were legitimate professional services, as the defendant's known counsel, in advocating the laying out of a street, by fair and open argument, at meetings of the board to which the public had access, and, after the street was laid out, in presenting the defendant's claims for damages in the same way. The board of street commissioners had quasi judicial duties to perform at both stages of the case. Public argument before it was proper, both on the question whether there was a public necessity for laying out the way, and on the damages to be allowed those whose land was taken. The retaining, for a definite sum, of counsel, avowed as such, to conduct the argument, was perfectly legal. Fuller v. Dame, 18 Pick. 472, 480; Trist v. Child, 21 Wall. 441, 450; Marshall v. Railroad Co., 16 How. 314, 335; Lyon v. Mitchell, 36 N. Y. 235, 241.

The plaintiff did not draw the petition in the case. He was not present at the hearing after the order of notice of intention to take the property. He did not do some other things which it might be supposed that one who really was engaged as counsel would do. On the other hand, from December to January-that is, before public proceedings were begun for laying out the street-he went at least three times a week to see the street commissioners. At this time he was chairman of the Democratic city committee. We perceive the inferences which a jury or the judge in this case might have drawn from these facts, and we appreciate the argument addressed to us upon the evils of corruption, and the 'nvalidity of contracts tending to induce

Defendant agreed to buy two boats at a certain price from third persons, the latter agreeing to build them for delivery by a certain time. The contract did not require defendant to furnish lumber, but thereafter the third persons ordered lumber from defendant, to be used in the boats, and defendant sent them an itemized and priced bill with the lumber. Defendant's evidence showed that it dealt in lumber for building boats, furnished it to boat-builders having contracts to build boats for it, and deducted the price of the lumber from that of the boats, and that this custom was known to the third persons. The latter testified that they formerly paid cash for lumber bought of defendant, but that later the custom was to deduct the price from that of the boat when completed. In an action by purchasers of the lumber from the third persons for its conversion by defendant, who had retaken it, held, that the question whether there was a bailment or a sale was for the jury.

Appeal from supreme court, general term, third department.

Action by Abel A. Crosby and others against the president, manager, and company of the Delaware & Hudson Canal Company, for conversion of lumber. The lumber had been ordered from defendant by the firm of G. & E. Harnden, who had a contract to build boats for defendant, and this firm thereafter executed a bill of sale of the lumber to plaintiffs in consideration of an indebtedness to them. Detend. ant afterwards took the lumber. A judg ment for plaintiffs was reversed by the general term, and a new trial ordered, (40 Hun, 637, mem.,) and on the new trial the complaint was dismissed. The judgment of dismissal was affirmed at general term, and plaintiffs appeal.

Lawton & Stebbins, (S. L. Stebbins, of counsel,) for appellants. F. L. Westbrook, for respondent.

ANDREWS, J. The transaction between the defendant and the Harndens was either a bailment of the lumber or a sale. Regarding it as a bailment, it was a bailment to be transmuted into a sale when

'Reversing 5 N. Y. Supp. 949, mem.

Lawton, Prest.," and the further indorsement, "Lawton Brothers." The question at the jury term was whether the indorsement "Navassa Phosphate Company" was the indorsement of defendant, and the court held that it was not, and dismissed the complaint. The judgment was affirmed by the general term, and plaintiff appeals.

Abram Kling, for appellant. Alexander & Green, (Eugene L. Richards, of counsel,) for respondent.

FINCH, J. We think the question of the authority of Lawton to bind the defendant company by indorsement was one of fact, which should have been submitted to the jury, and that the trial court erred in deciding it as a question of law. In other words, our conclusion is that the record contains some evidence of the existence of such authority, and enough to require the judgment of a jury upon it. Lawton was president and treasurer of the phosphate company, and the general manager of all | its business affairs in the city of New York. While it had an office in Baltimore, yet at the one in New York the buying and selling of phosphates, the shipment and discharge of cargoes, the annual meetings of the directors, the record of transfers of stock, the discount of business paper, the use of the money of the corporation for its purposes, and the account of the same in its cash-book, were daily and permitted transactions. This concentration of business at the New York office seems not to have been accidental or unanticipated, for the articles of association show that the company was incorporated under the laws of this state, and that the principal part of the business was to be transacted in the city of New York, while a "part of the business" was to be done in the island of Navassa, in the Caribbean sea, and also in the states of Massachusetts, Maryland, New Jersey, and Pennsylvania. At this principal business office in New York the only official of the company in attendance and conducting its affairs was Lawton, the president. One other director only was a resident of this state, but the whole burden and responsibility was thrown upon and borne by the president at the office in New York. The evidence shows that he chartered vessels for the shipment of phosphates from the island, that he attended to the insurance of the cargoes, that he paid the current accounts of the company, and indorsed checks which were payable to the company's order. He was not only president, but treasurer, and was consciously invested by the company with the broad general power inseparable from the position in which it placed him as the sole manager of its affairs at its principal place of business. It is true that the sales of phosphates actually delivered in New York were small in comparison with the bulk of the company's business, but they sold to some extent on foreign account, the shipments for which were direct from the island, the financial management appearing upon the books in New York, and it does not follow from the proof that the great bulk of the business was not done in

that city and by the president. The company had no cash capital. Its articles of association disclose that fact, and that all its shares issued were to be issued for property purchased. Its annual reports show the same thing. Where, then, was the money to come from with which to pay for the loading and shipment of the phosphates, the labor employed in the work, the premiums for insurance, and the charter of vessels? At least until profits were realized, and a surplus accumulated over and above dividends paid, the working capital was necessarily to be borrowed upon the credit of the company. No director was ignorant of that fact. Who, then, was authorized to do the borrowing? The evidence shows that it was done mainly in New York, and by Lawton, as president. For eight or nine years he was continually indorsing paper as agent of the company, procuring discounts, putting the proceeds to the credit of the company in its deposit accounts, and using those proceeds, so far, at least, as necessary in its business. Were the directors of the company ignorant of that fact? There is no proof that they ever borrowed a dollar to put or keep the enterprise in motion, except in one instance, to which I shall refer, and must have known that Lawton borrowed or furnished the necessary means. Two discounts, at least, which went to the bencfit of the company, were pointed out upon its cash-book kept in New York, and all of them were said to appear upon the stubs of the check-book. At the annual meeting held in New York each year Lawton made a report to the directors, and laid the books before them. They looked them over, not critically perhaps, but to some extent, and spread upon them was the truth of what Lawton was doing, and they "took his word for everything.'

But an occasion came when direct information was given, unless a very improbable presumption furnishes an answer. The witness Kirkland, who was employed in Lawton's office, went to Baltimore with notes drawn by Lawton Bros. for $20,000. He there met Dunan, who was secretary and commercial agent of the company, and John C. Graffin, who was vice-president and a director. Neither of these persons had any authority conferred by the by-laws to indorse the paper of the company, or bind it in any manner; and yet upon the representation of Kirkland that a stringent money market in New York made it impossible for Lawton to procure money there, and that he needed it promptly, Dunan indorsed the notes in the name of the company, and Grafflin procured their discount, and the proceeds were remitted to Lawton. It is difficult to believe that Grafflin and Dunan were lending the credit of the company to Lawton as an individual, and to enable him to meet his own personal obligations. That implies an utter violation of duty on their part, and so gross as to be improbable, though not impossible. It is a more reasonable supposition that they knew the paper which Lawton desired to meet was that upon which the Navassa Company had been made liable by his indorsement,

and so that they had some justification for the indorsement and discount which they made and procured. The plaintiff offered to prove that such indorsement was for the benefit of Lawton as treasurer, but the question was excluded.

While the by-laws of the Navassa Company place a restriction upon the action of its treasurer, they impose none upon that of the president, and it was competent for the company to authorize him to bind it by indorsement. That he undertook to do so upon large amounts of paper, and continued the practice for eight or nine years; that by that process he furnished the working capital of the company, so far as it appears to have had any; that annually he put the books and accounts before the directors, and that some of them were present when the indorsements were made, -are facts which were proved on the part of the plaintiff. The real difficulty which beset it, and which produced its defeat in the courts below, was in establishing that the directors knew that he was creating obligations against the company, and gave him authority by acquiescing in its exercise. But the circumstantial evidence, although by no means conclusive, tends to establish that knowledge. The directors knew that the business of the company was being carried on at New York by Lawton; that, in the absence of cash capital, it must have been done with borrowed money; and therefore that Lawton was creating obligations against the company which it would be called upon to reimburse. They knew, too, that no one of them had given a written consent to him as treasurer to create obligations, and so they must have understood that, to a greater or less extent, he was borrowing money on the credit of the company, either acting as treasurer without the directors' written assent, or acting as president without a specific authority expressly conferred. To either process they assented by silent acquiescence, and, while ignorant of details, it may well be urged that they were not ignorant of the material and fundamental fact. And this element of the situation is so far supplemented by the facts that the cash-book and check-books were put before them at the annual meeting; that one of the directors did each year examine the check-book of the Chemical Bank, which showed large discounts; that some of the paper was indorsed by Lawton in the presence of the directors, -as to raise a serious question of fact. It is true that some of this proof was contradicted, and much of it in some directions justly criticised, but that does not help us to disregard it entirely. If such authority was conferred, it will protect the plaintiff bank on that ground, and without proof on its part that its officers knew in advance of the exercise of such authority and its ratification. As to the plaintiff, it becomes an actual authority. The question, therefore, must be submitted to a jury, and when that is done nothing which we have said about the facts in the performance of our duty must prejudice or control their performance of their own. The judgment should be reversed, and a new trial granted, costs to abide the event. All concur.

(119 N. Y. 408)

COLWELL v. GARFIELD NAT. BANK.1 (Court of Appeals of New York. Feb. 25, 1890.) RECEIVERS-APPOINTMENT FOR DECEDENT'S Es

TATE.

Pending an action against the executors of a deceased partner's estate, plaintiff, one of the executors, was appointed receiver of decedent's property. After a decision against the plaintiffs therein, but before judgment entered, the receivership was extended on application of the plaintiffs therein, who proposed to appeal from the judgment when entered. Code Civil Proc. N. Y. § 713, subd. 3, authorizes the appointment of a receiver "after final judgment, to preserve the property during the pendency of an appeal. Held, that there was no authority for the second appointment, and that, after judgment had been rendered against said plaintiffs, he had no power to maintain an action in behalf of the estate.

Appeal from common pleas of New York city and county, general term.

For opinion at special term, see 4 N. Y. Supp. 5. From a judgment affirming the judgment of the special term overruling defendant's demurrer to the complaint, defendant appeals.

Louis O. Van Doran, for appellant. William B. Ellison, for respondent.

ANDREWS, J. The demurrer raises the question as to the power of the court of original jurisdiction, before judgment, in an action in which a receiver pendente lite has been appointed on the application of the plaintiffs, to make an order continuing the receivership, after judgment shall have been rendered, during the pendency of any appeal which may be taken therefrom to the supreme court or to this court. The complaint shows that an action was commenced by James and George Stewart, claiming to be creditors of the firm of Hepworth & Co., of which one Colwell was a member against Hepworth, the surviving partner, and the executors of Colwell, to sequestrate the estate of Colwell, and charge it with a debt contracted after the death of Colwell, by Hepworth, in the name of Hepworth & Co., in favor of the Stewarts, on the ground that by the partnership agreement the partnership business was to be continued after the death of either partner, for the joint benefit of the surviving partner and the estate of the deceased partner, and that the estate of Colwell was liable for the debt of the Stewarts. The case was decided in this court adversely to the Stewarts, in a decision in 115 N. Y. 328, 22 N. E. Rep. 160, 163, which affirmed the judgment of the special and general terms. The complaint in the present action further shows that, after the trial of the action of the Stewarts, but before any decision was made or rendered, a receiver pendente lite was appointed therein by the judge before whom the trial was pending, on the application of the plaintiffs therein, and with the assent of two of the then executors of Colwell, the third executor opposing the appointment. The order purported to vest in the receiver all the property and estate, real and personal, of Colwell, in the possession of, or under the control of, his executors and trustees under his will, with power to collect all debts and demands due or to become due to the es

'Reversing 5 N. Y. Supp. 956, mem.

tate of Colwell, to retain and pay counsel, and generally investing the receiver with full power to take possession of and manage the estate, subject to the order of the court. This original order, dated February 4, 1888, was followed by another order dated February 25, 1888, made by the same judge, but ex parte, so far as appears, continuing the receivership under the order of February 4, 1888, "with all the powers and duties" thereby imposed and conferred, for 30 days after the entry of judgment in the action, and, if an appeal shall be taken, until 30 days after the decision of the appeal by the general term, and in like manner until after the decision of any appeal which might be taken to this court, and thereafter "until an entry of an order of this [supreme] court discharging said receiver." The order of February 25, 1888, was also made before judgment. It recites the prior order, and also that, "this action having been tried and decision rendered, but no judgment entered, and the parties proposing to appeal from the judgment when entered, "etc. The decision, and the judgment subsequently entered thereon, was adverse to the plaintiffs in the action, by whom the orders appointing and continuing the receiver were procured. This action was commenced by the receiver after judgment against the Stewarts, in the action in which he was appointed had been affirmed at the general term, to recover a debt owing by the defendant to the estate of Colwell

We are of opinion that the court had no power, prior to judgment, to make the order of February 25, 1888, continuing the receivership pending appeals from a judgment which might thereafter be rendered in the action. The original action was, at least, very unusual. The plaintiff therein sought to take the settlement of the estate of Colwell out of the hands of his executors, and oust the surrogate of the jurisdiction confided to him in the settlement and distribution of the decedent's estate. No grounds are set forth in the complaint in the present action for the exercise in the particular case of this extraordinary jurisdiction; but assuming that a case could have been made, and that the original order of February 4, 1888, was not void for want of jurisdiction, we are nevertheless of the opinion that the court had no power, by another order made before judgment, to continue the receivership after judgment, and pending appeals therefrom. The power of the court to appoint receivers is prescribed by section 713 of the Code of Civil Procedure. The first subdivision of that section provides for the only case where a receiver can be appointed before judgment, and that is the usual receiver pendente lite, whose active functions terminate with a judgment adverse to the party who procures his appointment, although his character as receiver may continue, for the purposes of rendering his account, until he is by order discharged from his trust. Whiteside v. Prendergast, 2 Barb. Ch. 471. But we find no authority to support the proposition that a receiver pendente lite, after judgment against the party at whose instance he was appointed, | may commence an action in behalf of the

estate which he represents. The second subdivision of section 713 authorizes the appointment of a receiver, by or after final judgment, to carry the judgment into effect. This has no application to the present case. The third subdivision authorizes the appointment of a receiver "after final judgment, to preserve the property during the pendency of an appeal. The order of February 25, 1888, continuing the receivership, was made before, and not after, final judgment, and the order was not justified by this subdivision.

We need not determine in this case whether the jurisdiction of the supreme court to appoint receivers can be exercised only in the cases and under the circumstances prescribed by section 713 or by other statutes. But in cases where the provisions of section 713 are applicable, and the statutory provisions furnish an adequate remedy, the power of the court is, we think, limited by that section, and it must proceed in the manner pointed out thereby, or else its orders will be void. It is within the power of the court, after judgment, to appoint a receiver pending an appeal therefrom, although the judgment denies relief to the plaintiff. But the Code evidently contemplates that this application is to be made upon the whole case, including the adverse judgment. It does not permit an order to be made in anticipation of the judgment, continuing the receivership after judgment shall have been rendered. The protection of the rights of parties does not require any departure from the practice prescribed by section 713. The power of the court to stay proceedings pending an application for the appointment of a receiver, under the third subdivision, preserves any substantial rights of the defeated party. The order of February 25th has no added force because two of the executors of Colwell may have united in the application for it. or for the reason that the receiver is one of the executors. It was opposed by the third executor, and his opposition prevents the order being, regarded as made by the consent of all the parties in interest, assuming that such consent would have conferred jurisdiction. We think the order of February 25th was made without jurisdiction, and did not operate to vest in the plaintiff a right of action to recover the claim sued upon. The judgments of the special and general terms should therefore be reversed, and judgment directed for the defendants on the demurrer. All concur.

(119 N. Y. 404)

FINLAY V. CHAPMAN. (Court of Appeals of New York. Feb. 25, 1890.) DISCOVERY-DISCRETION-APPEAL.

The granting or denying of an order for discovery is within the discretion of the supreme court, and not reviewable on appeal.

Appeal from supreme court, general term, third department.

Louis Hasbrouck, for appellant. John M. Kellogg, for respondent.

O'BRIEN, J. This action is brought by the plaintiff, as assignee of a residuary legatee and devisee of Augustus Chapman, deceased, against the defendant Richard