Farnham v. Benedict

Tbe gravamen of this action, as stated in the brief submitted to us by tbe counsel for tbe plaintiff, is that the defendant, having in bis possession certain instruments purporting to be bonds of tbe town of Attica, issued in aid of tbe construction of a certain railroad, but which were, in fact, invalid by reason of certain defects known to tbe defendant, sold tbe same to Iona fide purchasers, at par, and thereby rendered tbe town liable to pay them.

It is a sufficient answer to this claim, as it seems to us, that tbe defendant owed no duty to tbe town, in respect to tbe disposition of tbe bonds. Tbe bonds were delivered to tbe railroad company by the commissioners of tbe town, in exchange for the stock of tbe company. Tbe commissioners bad authority to deliver them for that purpose. (Laws 1869, chap. 907, §5.) Tbe defendant received them as tbe president of tbe company for its use; be sold them for tbe company, at par, for cash, and, as the referee found, be accounted to tbe company therefor. It is true that, at tbe time of tbe sale of tbe bonds, tbe defendant was tbe supervisor of tbe town, but be bad not, and did not assume to have, any control over tbe bonds by virtue of that office. The only authority be bad over tbe bonds, and tbe only duty be was under in respect to them, was as tbe officer and agent of tbe company.

Assuming that the bonds, while in tbe hands of tbe commissioners, were void for any reason, or that tbe stock for which tbe commissioners were about to exchange them was worthless, doubtless tbe commissioners might have been restrained from disposing of them (Laws 1872, chap. 161; Ayers v. Lawrence, 59 N. Y., 192), and *24even after the exchange, if the stock was worthless, so that the bonds were without consideration, the company, and the defendant, as its officer and agent, might have been restrained from negotiating them, but no such remedy having been resorted to, it is difficult to see upon what ground the defendant is responsible to the town for his agency in selling the bonds, after they were delivered to the company by the commissioners.

For these reasons, as well as those stated in the opinion of the learned referee, we think the judgment should be affirmed.

Judgment affirmed.