1. Reports of cases argued and determined in the Supreme Court of Alabama - Google Books Result by Alabama. Supreme Court - 1897 - Law That it appears from the said bill that Enoch Ensley subscribed for certain stock and bonds in the Lady Ensley Coal, Iron & Railroad Company, to be paid for ... books.google.com/books?id=t5UKAAAAYAAJ...
Reports of cases argued and determined in the Supreme Court of ..., Volume 112 By Alabama. Supreme Court
Moore v Ensley 332 SUPREME COURT Nov Term
------Ensley The defendant Walter Moore who is the appellant on this appeal filed a separate demurrer to the bill and for grounds of said demurrer assigned the following
1]--- That it appears from the said bill that Enoch Ensley subscribed for certain stock and bonds in the Lady Ensley Coal Iron & Railroad Company to be paid for in certain designated and described property and it also appears from the said bill that the said Enoch Ensley during his life time never complied with the said contract of subscription on the contrary it appears that the title to a part of the property wholly failed and that as to another part of the property the same was never delivered and the bill contains no offer on the part of the complainant to have delivered or have made good to the Lady Ensley Coal Iron & Railroad Company the amounts which it appears it has lost by reason of the failure of the said Ensley to comply with the contract on his part
2]--- That the contract of subscription on the part of Enoch Ensley is shown by the bill never to have been complied with and complainant fails to offer to comply with the same 3]--- That until the said Enoch Ensley or complainant as his executrix has complied with the contract of subscription made by him she is not entitled to any stock or bonds in the said Lady Ensley Coal Iron & Railroad Company as against this defendant who fully complied with the terms of his subscription
4]-- That it is shown by said bill that this defendant was a subscriber to the capital stock of the Lady Ensley Coal Iron & Railroad Company and it appears by said bill that this defendant has in all things complied with his contract of subscription and that the said Enoch Ensley has wholly failed to comply with the contract of subscription made by him and the bill does not show that the estate of Enoch Ensley is able or willing to do equity by making good the contract of subscription made by the said Enoch Ensley
5]-- That it appears from the bill that the complainant is in effect seeking to reinstate and enforce the mortgage for $1,500,000 pursuant to the terms of the original contract of subscription made by her testator that the estate of her testator owns and holds a majority of all of the capital stock of the corporation that the original contract of subscription was never carried out or performed by her testator and that thereafter the stock VOL 112---- holders of the Lady Ensley Coal Iron & Railroad Company with the consent of the agent of the complainant cancelled that part of the original contract of subscription which authorized the issue of the bonds and authorized the issue of the bonds under the $500,000 mortgage that the complainant accepted the bonds under the last mentioned mortgage and with full knowledge of the fact that this first mortgage had been cancelled of record retained and still retains the said bonds so received by her and makes no offer to surrender the same except upon condition
6]--- That it appears from the said bill that the complainant has accepted a part of the fruits of the transaction alleged to have been illegal and wrongful and that she continues to hold and retain these fruits with knowledge of all the facts
7]--- That it is not averred in said bill that the complainant did not have the benefit of the advice of counsel nor is it shown why she was ignorant of the facts of which she avers she was ignorant nor is it shown why she could not have discovered them nor is it shown how or by what means or when she discovered them
8]--- For aught that appears in the bill complainant was fully advised by counsel learned in the law as to every step that was taken in connection with the Lady Ensley Company
9]-- That it appears from said bill that at and before the same was filed complainant knew all the facts therein alleged and with full knowledge she has held and retained eighty of the bonds secured by the mortgage made May 25 1892 which purport on their face to be first mortgage bonds and secured by a first lien on the property of the Lady Ensley Company
10]-- That upon discovering the facts alleged in the bill complainant was bound to elect to affirm or repudiate the said mortgage for $500,000 in its entirety and by her said bill she has elected to affirm said mortgage
11]-- That said bill is wholly inconsistent in this that complainant seeks to affirm said mortgage for $500,000 so far as the same is advantageous to the estate of her testator and repudiate it in part
12]-- That it appears from said bill that complainant since the death of her testator has been in control of almost the entire capital stock of the Lady Ensley Company with full power to elect directors and agents of her own selection and for aught that appears in said bill complainant did select and elect directors and agents of said- corporation since the death of her testator and such directors and agents so selected by her had full knowledge and notice of all the matters complained of by her
13]-- That it appears from said bill that all of the facts alleged in said bill of which complainant now complains are matters of record in the corporate records of the Lady Ensley Company to which complainant had access and it is not averred nor shown why complainant did not ascertain the facts now averred nor does the bill show when her counsel first obtained information of the facts now alleged nor why they did not obtain such information On the submission of the cause upon this demurrer the chancellor decreed that the grounds thereof were not well taken and overruled them From this decree the present appeal is taken and the same is assigned as error
-----ALEX T LONDON for appellant The complainant can not maintain the bill in this case The bill seeks to have the specific performance of the original contract of subscription decreed and enforced in favor of the complainant There is not only no offer to perform the contract on her part by paying the value of the property which had been accepted by the corporation in payment of her testators's subscription and which was lost to it but the bill does not even contain a suggestion that the complainant is able to perform the contract on her part.
-----The rule is universal that specific performance will never be awarded to a party who has not fully performed the contract on his part unless the bill contains an offer to perform it In fact in case of a sale a tender of the purchase money found to be due the vendor is an essential prerequisite Fry on Specif Perf 474 The rule as stated by Mr Pomeroy in reference to the duty of the complainant to do equity is the complainnat whether purchaser or vendor is compelled to perform his part of the agreement as a condition to his obtaining relief against the defendant 1 Pom Eq 392 And he again declares that the doc trince is fundamental that the party seeking performance must do or offer to do all that is required of him 2 Pom Eq 1407 Jenkhmr Haerison 66 Ala 345 If the satisfaction of the mortgage in several counties is VOL 112—
----- To be cancelled on the ground as averred that the same was a fraud upon the complainant and restore the parties to the position they occupied before the fraud was committed then there must be an offer to do equity 2 Pom Eq p 1285 910
----- Even if the complainant was entirely ignorant of the purposes for which the proxy was given to Hodgson and she knew nothing of[[ Hodgson's]] actions under this proxy or if the agreement to cancel the $1,500,000 of the bonds until sometime after the bill does not aver facts which entitled the complainant to relief by reason of this ignorance because it is not definitely shown by the averments of the bill when the complainant discovered these facts When the facts became known to the complainant it was her duty then and there promptly to disaffirm and disaffirmance means that she was compelled to surrender all of the benefits that she had received under the contract made by her agent as alleged without any authority from her 2 Pom Eq 897 917 G rymes v Sanders 93 US 55 Locktcood e Fitts 90 Ala 150
---- She was bound to elect whether she would take the bonds or not If she accepted them she is estopped to claim against the conveyance Bell v Craig 52 Ala 215 The bonds and mortgage upon their face purport to be a first lien on the property The complainant accepted eighty of them for a debt due to her testator's estate She not only kept them up to the time that she discovered the facts but still holds them and still asserts her right to them and asks the court now to declare and the court has held that they are in effect second mortgage bonds.
---- If a party adopts a part of a transaction he adopts all He must reject it entirely if he desires to obtain relief against it 2 Pom Eq 916 917 2 Herman Estop 1039 Robertsou r Bradford 73 Ala 116 Wooilstnck Iron Co r Fullenwider 87 Ala 584 Creamer v Holbrook 99 Ala 55 Oden r Dupuil 99 Ala 36 Adams r Adams 39 Ala 603 Reaves v Uarrett 34 Ala 558 When a person disaffirms a transaction he must restore to their former condition those who have sustained injury by reason of such disaffirmance as a condition precedent to obtaining relief Kisterbock's Appeal 51 Pa St 483 Brigyx r Hice 130 Mass 50 The complainant ratified the issue of the $500,000- bonds One who voluntarily accepts the proceeds of act done by one assuming authority though authority to be his agent ratines the act and takes it his own with all its burdens as well as all its benefits He may not take the benefits and reject the burdens he must either accept them or reject them as a whole Mechem on Agency 148 Abbott r May 50 Ala 97
----- Where the owner of a mortgage voluntarily accepts proceeds of an unauthorized discharge of it the discharge was held to be ratified Tooker r Sloan 30 NJ Eq 394
---- JAMES WEATHERLY and WALKER PORTER & WALKER contra A corporation is a legal entity distinct from its corporators and the transaction between Enoch Ensley as subscriber and the Lady Ensley Coal Iron & Railroad Company must be treated as a trasaction between two distinct persons each of whom was sui juris and competent to deal and contract with one another Moore & Hanclley Hardware Co v Towem Hardware Co 87 Ala 210 O Bear Jewelry Co r Volfee 106 Ala 205 The contract of subscription and for the sale and conveyance of the property in excess of the par value of the stock subscription being one and the same transaction and one entire contract it can not be avoided in part and accepted in part nor can it be avoided in whole without restoring to the owners thereof the property conveyed under such contract.
---- If one be induced by the fraudulent representations of the mortgagor to deliver up the mortgage with the mortgage note the mortgage may be still foreclosed if no one has afterwards acquired an interest in the property relying upon the discharge Lowll v Wall 12 So Rep Fla 659 Grimes v Kimball 3 Allen Mass 518 Freeholders v Thomas 20 NJ Eq 39 Jones on Mortgages 966 One who purchases with notice of prior recorded mortgage which has been cancelled without authority purchases subject to the lien of such prior mortgage Fosler e Paine 63 Iowa 85 Entry of satisfaction of mortgage on the records made without authority is void Bell r Wilkinson 65 Ala 477 Eagle v Hall 45 Mich 57 State v Grcene 101 Ind 532 DeLaureal v Ketuper 9 Mo App 77 The entry of satisfaction upon a mortgage record is no protection to a person claiming VOL 112
----- To be a bonafide purchaser when made without authority Woodruff v Mutsehler 34 NJ Eq 33 Scott v Field 75 Ala 419 Where one holding the first mortgage releases the same of record for the purpose solely of giving priority to a second mortgage held by another the first mortgage still subsists as between the parties and may be foreclosed Wiwdr H oorf 61 Iowa 256 Phelpsv Fockler 61 Iowa 340
---- When a mortgage is released to enable the execution of a second mortgage with an agreement that the original shall stand as between the parties a third person taking a mortgage with notice of the first mortgage has a subordinate lien to the first Farmers Bank r Buttterfield 100 Ind 229 A general proxy to vote at a corporate meeting of stockholders does not confer power to vote for a dissolution of the corporation nor for any but the ordinary business of the corporation Cook on Stocks & Stockholders 610 etseq The purchaser of a mere equity is not an innocent purchaser nor one who doea not part with a valuble consideration h erall r Taylor 99 Ala 12
----- One who takes bonds as collateral security for a pre existing debt is not an innocent purchaser even though extension or indulgence be given to the pledgee on his debt Reid v Bank of Mobile 10 Ala 199 and c ases cited Where a mortgagee or trustee under a trust deed has information that a prior mortgage or trustee has released the property from the mortgage or trust without payment of the notes or their surrender or express authority from the holder of them he will take the prop irty subject to any equitable right of the holder of the notes to secure the payment of which the first mortgage or deed of trust was executed fnsiiranee Co e Eldridge 26 L Ed LI S Rep 245 24 Ib 706 20 Ib 167 Estoppels are protective only and are to be invoked as shields and not as offensive weapons
---- Their operation in all cases should be limited to saving harmless or making whole the person in whose favor they arise and they should not in any case be made the instrument of profit or gain Liudsagr Cooper 94 Ala 170 sc 16 LRA 813 notes Thompson r Campbell 57 Ala 188 Nelson e Kelly 91 Ala 569 A party will be relieved in equity from a written agreement of release given.
A party will be relieved in equity from a written agreement of release given to be a bonafide purchaser when made without authority Woodruff v Mutsehler 34 NJ Eq 33 Scott v Field 75 Ala 419 Where one holding the first mortgage releases the same of record for the purpose solely of giving priority to a second mortgage held by another the first mortgage still subsists as between the parties and may be foreclosed Wiwdr H oorf 61 Iowa 256 Phelpsv Fockler 61 Iowa 340
---- When a mortgage is released to enable the execution of a second mortgage with an agreement that the original shall stand as between the parties a third person taking a mortgage with notice of the first mortgage has a subordinate lien to the first Farmers Bank r Buttterfield 100 Ind 229 A general proxy to vote at a corporate meeting of stockholders does not confer power to vote for a dissolution of the corporation nor for any but the ordinary business of the corporation Cook on Stocks & Stockholders 610 etseq
---- The purchaser of a mere equity is not an innocent purchaser nor one who doea not part with a valuble consideration h erall r Taylor 99 Ala 12 One who takes bonds as collateral security for a pre existing debt is not an innocent purchaser even though extension or indulgence be given to the pledgee on his debt Reid v Bank of Mobile 10 Ala 199 and c ases cited Where a mortgagee or trustee under a trust deed has information that a prior mortgage or trustee has released the property from the mortgage or trust without payment of the notes or their surrender or express authority from the holder of them he will take the prop irty subject to any equitable right of the holder of the notes to secure the payment of which the first mortgage or deed of trust was executed fnsiiranee Co e Eldridge 26 L Ed LI S Rep 245 24 Ib 706 20 Ib 167
----- Estoppels are protective only and are to be invoked as shields and not as offensive weapons Their operation in all cases should be limited to saving harmless or making whole the person in whose favor they arise and they should not in any case be made the instrument of profit or gain Liudsagr Cooper 94 Ala 170 sc 16 LRA 813 notes
---- Thompson r Campbell 57 Ala 188 Nelson e. Kelly 91 Ala 569 A party will be relieved in equity from a written agreement of release given--- creditor to wit on November 18 1891 died and his widow the complainant in this bill became the executrix of his will She resided in Memphis Tennessee where her husband lived at his death In March thereafter she executed a paper as follows:
---- This is to witness that I hereby nominate constitute and appoint [[JOHN HP Hodgson]] my attorney in fact and agent to represent me and to vote the stock held by me as executrix of [[Enoch Ensley]] deceased of the Lady Ensly Coal Iron & Railway Company at a meeting of the stockholders of said company to be held at Sheffield Alabama on March 16 1892 Signed [[MARY LB ENSLEY]]]
Executrix Witness BB BEECHER ; HENRIETTE E HODGSON ----
-----Hodgson was her step son in law and had become a stockholder and director of the company A meeting was held at the time and place designated and Hodgson attended and acted under this proxy The only business transacted was the adoption of the following preamble and resolution Whereas we deem it best for the welfare and interest of this company that the mortgage of date February 2 1891 heretofore made to the Central Trust Company of New York as trustee and now on the records of five counties in the State of Alabama as well as the $1,500,000 of bonds secured therein and now in the hands of the Central Trust Company having never been used or negotiated should be cancelled and annulled and thus remove an incumbrance on the properties of the Lady Ensley Coal Iron & Railroad Company now therefore be it mtolved that the board of directors of this company be and are hereby authorized and requested to take such action as they deem best to have said mortgage and bonds cancelled and to have such cancellation properly appear on the records of said five counties in Alabama in which said mortgage has been recorded About the same time the following paper was executed by the parties whose names are signed thereto the said Hodgson signing the name of Mrs Ensley under no other than the authority conferred by said proxy
----Moore v Ensley SHEFFIELD ALA March 16 1892 We the undersigned owners of bonds and stock the Lady Ensley Coal Iron & Railroad Company that the mortgage heretofore made by the Lady Ens ley Coal Iron & Railroad Company of date 2 1891 and bonds therein described shall be and annulled with the view and purpose of the company of disencumbering the said company of mortgage and bonds and we authorize and ask board of directors to procure such cancellation of the undersigned to retain in lieu of our said bonds cancelled our respective interest in the properties of company Shares Signed 19,000
---- MARY LB ENSLEY Executrix By JHP HODGSON proxy 300 WALTER MOORE 350 MARTIN ENSLEY 300 THOS D RADCLIFFE 30 WM SNERD 20 JHP HodgsoN 20,000
---- Thereafter the Trust Company destroyed the bonds cancelled the mortgage and entered upon records where it had been recorded acknowledgment satisfaction thereof by the payment of the debt thereby It is not pretended that this was done otherwise than by the authority of the said resolution agreement there having been in fact no payment other satisfaction of the bonds The main purpose the bill which is filed by Mrs Ensley as executrix to re instate and enforce the bonds and mortgage Without undertaking to ascertain the meaning of said agreement of March 16 and the resolution to it is related we will assume that they mean something and if binding on the complainant effectuated something and will proceed to inquire whether or not the averments of the bill they do bind the complainant
---- We think it cannot be open to serious doubt that proxy given by Mrs Ensley to Hodgson did not upon him authority to adopt the said resolution or execute the said agreement The resolution in its for VOL 112
---- THE resolution in its formal and technical import is a novel one Considered as emanating from a meeting of corporate stockholders it is in effect a declaration by a mortgage debtor that it the debtor deems it best for its welfare and interest that its mortgage and bonds thereby secured be cancelled and annulled and removed as an incumbrance on its property and an order to its directors to proceed to have it done It is apparent of course that such a declaration considered as the act of a debtor is without more utterly nugatory Without the concurrence of the creditor it is impossible of execution When a meeting of stockholders of a body corporate is called or convenes in regular session the presumption is that they meet to transact the business of the company in their capacity as stockholders and within the limitations of that capacity They meet to perform strictly corporate functions done in the legitimate prosecution of the corporate enterprise.
---- They can lawfully act in such meeting in no other character than as stockholders and any act done affecting the rights of those absent not assented to which is without the scope of corporate business and authority is utterly void as to the affected party not assenting When therefore the meeting of the stockholders of the Ensley Company of March 16th was approaching and Mrs Ensley gave to Hodgson her proxy she gave him warrant only to represent her as a stockholder and only to do for her those things which pertained to the authority of stockholders as such The meeting in question in realty was not a stockholders meeting when tested by what was done No corporate function whatever was performed unless it be that corporate assent to the cancellation of the bonds and mortgage by the creditors was manifested by the action taken It was essentially a meeting of creditors of the company acting solely upon the subject matter of their securities Those present it is true were stockholders and including Mrs Ensley if she had been legally represented owned all the stock but that fact only shows the inducement and consideration upon which as creditors they mutually agreed to release their claims We emphasize The act done and now the subject of complaint was the release of the debtor from an existing indebtedness and it would be absurd to say that representatives of the debtor stockholders acting in their 16
---- The act done and now the subject of complaint was the release of the debtor from an existing indebtedness and it would be absurd to say that representatives of the debtor stockholders acting in their capacity as such could do the act If the creditors who alone could effectuate it happened to be also the representatives of the debtor their act in creating the release must necessarily be attributed to their character as creditors Mrs Ensley did not empower Hodgson to attend a creditors meeting and represent her interests as creditor and nothing he could do affecting her rights as a creditor would bind her at all unless she subsequently ratified it.
---- If I being a stockholder of a corporation and also a creditor give A my proxy to represent me in stockholders meeting it would be shocking to hold that he could lawfully represent tue and vote away my rights as a creditor So the question is whether the bill shows Mrs Ensley afterwards ratified the acts of Hodgson The bill gives substantially the following history When Mrs Ensley became executrix she did not know of the various transactions of and touching the Ensley Company whereby her testator had become entitled to these bonds or to payment for the purchase price of property conveyed by him to the company and did not learn of the same until about the middle of September 1894 say 35 or 40 days before she filed this bill She was twenty four years of age at her husband's death and had no knowledge of practical affairs and knew very little concerning the business interests and dealings of her husband For a long time after his death she was stricken with grief and confined to abed of sickness and being entirely ignorant of the rights of the estate in reference to said purchase money and bonds and being unable to attend to any business or to properly understand and appreciate her duties as executrix she signed and executed the said proxy to Hodgson while in bed at her home in Memphis She says moreover that Hodgson was a young physician who had married a daughtcr of Mr Ensley by his first wife and was himself ignorant as to business affairs and did not know the rights of the estate in regard to said bonds and mortgage and that in all he did at said meeting he was prompted by and acted under the advice and instructions of one WM Sneed a Memphis lawyer who had become president of the company and Thomas D Radcliffe the secretary She says also that Sneed was in close business relations with certain Memphis banks VOL 112
---- Thomas D Radcliffe the secretary She says also that Sneed was in close business relations with certain Memphis banks and individuals who acquired nearly a half million dollars of mortgage bonds of the company issued shortly after said release was affected to which reference will presently be made that he was a brother in law of the president of one of said banks and was the agent and factor of the Ensley Company as well as of said banks and individuals in the negotiations which resulted in the acquisition of the bonds by them The bill contains the following allegations Complainant knew and states it as a fact that said Enoch Ensley had by his own money brains and industry acquired the property which afterwards went into the possession of the corporation which he had caused to be created designated as the Lady Ensley Coal Iron & Railroad Company and which was sold to the Ensley Company
--- She had known also that he had acquired other large and valuable properties or a large interest in them and that it was his purpose to put them all into one vast aggregate so that they might be more economically as well as profitably and largely developed She had always regarded these properties as her husband's private property which had been bought and collected together and was to be developed by his money and brains and she knew no corporation in the business and had no reasons to suppose that any corporation owed him anything She was utterly ignorant not only of the facts whereby said Ensley Company was organized as a corporation and acquired said properties but of the said Enoch Ensley's claims and demands against said corporation
--- It was mentioned to her when she was stricken down and sick and unable to think and care for such things that there were a mortgage and bonds which were to be cancelled and that new ones were to be issued to save the credit of the company but only a small portion of them were to be used and that the total indebtedness of the company was only about $200,000 including the debt of $41,000 to the estate for money advanced and loaned by said Enoch Ensley to said company and that there was enough iron on the company's premises in Russellville to pay off a large part of this indebtedness and complainant was led to suppose that this $1,500,000 mortgage and the bonds secured thereby were merely the evidence of an unfinished and incomplete ---transaction that no money had been advanced on them no rights had become attached to or vested in them and that therefore no one could be harmed by their cancellation and destruction which would be merely like the up of an uncomnumicated letter She did not know the connection of the Central Trust Company with the matter nor even the fact that the mortgage had been recorded She only knew that there were a mortgage and bonds but did not know that the bonds or mortgage had been used or delivered to any one but under such circumstances as these she gave the proxy to said Hodgson to vote the shares standing in her name on the books of the company as executrix of said [[Enoch Ensley's estate]] and under such circumstances she subsequently gave the power of attorney and proxy to said Hodgson presently to be explained On May 23 1892.
---- Mrs Ensley executed to said Hodgson a written appointment as her agent and attorney in fact to represent her and vote her stock held as executrix in said company at a meeting of stockholders to be held at Eussellville Alabama on May 24 1892 confirming and ratifying all votes and acts given and agreed to in matters appertaining to the business of the company at such meeting as fully and effectually as if she were personally present and consented thereto:
---- This meeting was held Hodgson represented her an issue of $500,000 of bonds secured by mortgage on all the company's property to be executed to said Central Trust Company as trustee was authorized and the bonds and mortgage were subsequently issued and executed It is stated in the briefs of counsel on both sides that these bonds appear upon their faces to be the first mortgage bonds of the company though the omission from the transcript by agreement of the exhibits to the bill leaves the fact not shown by the record before us $400,000 of these bonds the bill avers were pledged by Sneed or Radcliffe with certain named New York and Memphis banks and certain named individuals who are made parties to the suit as collateral security for the payment of existing debts of the company The averments fully deprive these holders of the bonds of the character of bona fide holders for value without notice of prior equities It is averred that twenty of said bonds $20,000 were delivered to defendant Walter Moore VOL 112
---- The averments fully deprive these holders of the bonds of the character of bona fide holders for value without notice of prior equities It is averred that twenty of said bonds $20,000 were delivered to defendant Walter Moore---and that he or one of the other defendants resident Memphis has possession or control of them Eighty said bonds $80,000 were delivered to the by said Radcliffe to secure the estate so she was informed and so she supposed for a debt of $41,000 due to it by for money loaned and which was unsecured At some time prior to the present suit brought a suit in the court below reference to said claim of $41,000 but when brought what its nature and how disposed of do not appear The complainant offers to surrender these 80 bonds to be disposed of as the court may see proper surrender is deemed necessary to the relief she seeks:
---- It is remembered that there is here no question vacating the acts of Hodgson as having been wrongfully induced for we have seen that they were not the acts the complainant through a lawfully authorized agent and we have given the above stated history as constituting the facts which counsel earnestly contend show ratification by the complainant In order to ratification knowledge of all the material facts essential to intelligent action on the part of the ratifying is necessary When based upon omission to act it involves acquiescence and of course there no acquiescence without knowledge Ratification is presumed
---- It is matter which must be affirmatively and proved by him who relies upon it The that where a party prima facie chargeable lapse of time as lacheN relies upon ignorance of to repel lnches he must clearly allege and explain ignorance of the facts and how and when he learned cannot apply when the charge is ratification of an act by acquiescence Until it is alleged shown against him that he knew of the unauthorized act done for him he is not called upon to state or anything in reference to it The burden we repeat is upon him who relies upon acquiescence to allege and prove it Without commenting upon the facts of which are above substantially set out it is enough say that they show practically no act of ratification absolutely no knowledge on the part of complainant which would render her omissions to act a ratification until 35 or 40 days before the filing of the bill
---- The authority given by her to issue a half million bonds and her acceptance of some of them to secure debt though they appear on their face to be first mortgage bonds did not affect her right to insist upon after discovered priority uor did the fact of her retaining the bonds after learning the facts affect her to insist on her priority She had the right to them as security of the debt for which she them secondary to the prior purchase money mortgage and so far as appears bv the bill it was not that she offer to surrender them If the company the debt for which she receives them they are her property though the prior purchase money bonds and mortgage be reinstated and take precedence over them We think one situated as the complainant was not well have been expected to prepare and file a suit this character magnitude and importance in less thirty five to forty days after discovering her rights that there is no element of laches or ratification in that delay There was in it no evidence of an intention to abide by the release no injury accrued to anyone from it .
---If it be said that Hodgson was informed the previous existence and cancellation of the money bonds and mortgage when he represented complainant under the power of attorney of May 23d voted for the $500,000 of bonds as first mortgage bonds thereby recognizing the prior cancellation it is a sufficient answer that his information was acquired that power of attorney was executed and hence possessed at and before he acted in execution of the power He was under no fiduciary duty to communicate to principal information so acquired To the extent that there was a failure of title to of the property sold by complainant's testator to company the latter may have abatement of the money Probably a cross bill is necessary if the abatement be not tendered by the complainant in the original bill Surely the vendor will not be barred of his security for the purchase money at all there was a failure of title to a part of the property sold Equitable abatement in such cases accomplishes justice It is unnecessary to construe the resolution and agreement adopted and signed by Hodgson in March 1892 VOL 112
---- He was under no fiduciary duty to communicate to principal information so acquired To the extent that there was a failure of title to of the property sold by complainant's testator to company the latter may have abatement of the money Probably a cross bill is necessary if the abatement be not tendered by the complainant in the original bill Surely the vendor will not be barred of his security for the purchase money at all there was a failure of title to a part of the property sold Equitable abatement in such cases accomplishes justice It is unnecessary to construe the resolution and agreement adopted and signed by Hodgson in March 1892 since we hold upon the allegations of the bill that the complainant is not bound by them There is no error in the decree of the chancellor and it is affirmed