and 85 New York State Reporter.

able in the morning, so that the accumulation of water would have been the reason of the refusal of the elevators to act, instead of the insufficient pressure of steam. All that the defendant company's foreman did was to increase the pressure from 75 pounds to 120 pounds to the square inch. There was nothing to show that this increased pressure would blow out this pipe, when the former pressure of 75 pounds would have been insufficient for that purpose. It may be surmised that, if the drips had been closed, and if water had been allowed to accumulate in considerable quantity in these pumps and in the exhaust pipes connected with the roof, the turning on of the steam at the pumps would gradually have caused that water to be forced up to the roof, and would have been sufficient to force the water out of the pipes upon the roof. But it does not appear that there was not other means by which this water could have accumulated in this exhaust pipe to the roof, except from these pumps, and it does not, therefore, follow, because water was blown out of the pipes in the roof, that it had accumulated in the pumps or the pipes connected with the pumps, or that the defendant's foreman did not examine the drips before he turned on the steam, because of the fact that there was water in the exhaust pipes to the roof, which was subsequently blown out by the pressure of steam from the pumps. Here the steam had been on during the night at a pressure of 75 pounds, the pumps working apparently without difficulty, except that the force was not sufficient to move a loaded elevator. There was no evidence to show that simply increasing the pressure of steam supplied to the pumps would be likely to cause such an accident as followed, especially if the drips from the pumps were open; and there was no evidence that they were not. I think, therefore, that the finding of the jury that the defendant company's foreman did increase the pressure of steam without examining the valves to see whether the drips from the pumps were open or not was unsupported by the evidence, and for that reason the judgment should be reversed.

MOQUIN et al. v. BENNETT.

(Supreme Court, Trial Term, Kings County. April, 1898.)

1. NOTE-BONA FIDE PURCHASER.

A husband, carrying on his wife's business, and having a power of attorney to do all acts for her therein, including making bills and notes, made a note, signed in her name by him as attorney in payment of his individual debt. The payee informed a purchaser of the note that the husband owed him money, and that in that way the note was made. Held, the purchaser took with notice that it was given in payment of the husband's personal obligation.

2. SAME-BURDEN OF PROOF.

In an action by an assignee of a note given by a husband in his wife's name for his personal obligation against the wife, where the husband had authority to give notes in her name in her business, but this note was given without her authority, or consideration to her, for his personal obligation. the burden was on the assignee to show it was taken without notice of such lack of authority.

Action by William C. Moquin and others against Annie R. Bennett on a promissory note. Judgment for defendant.

GAYNOR, J. Either Mr. Wells or his wife Fannie E. Wells owed the plaintiffs a bill for coals. Mr. Wells presented to them the note in suit in payment, and it was accepted. The note being $140 in excess of the bill, the plaintiffs paid that sum to Mr. Wells in cash. The note is to the order of the said Fannie E. Wells, and purports on its face to have been made by "A. R. Bennett, per J. P. Bennett, Atty." J. P. Bennett is the husband of A. R. Bennett (the defendant), and at the time the note was made he was carrying on her business of coffee merchant, and held her written power of attorney to do all acts for her in the said business, including the making of bills and notes. I feel constrained to find that when the plaintiffs received the note they were informed that it was given by Mr. Bennett in payment of an indebtedness not of his wife but of himself to Mr. Wells. The plaintiff who testified says that on occasions when he demanded payment of Wells of his indebtedness to the plaintiffs, Wells said that Mr. Bennett owed him a great deal of money, and was going to pay in installments; and then he adds that in that way the note was made, or as he says, "paid." He makes no claim that this latter was information he acquired after he had received the note, but states it as something he knew when he received the note. This shows that the plaintiffs did not receive the note in good faith, viz.. without notice or knowledge that it was made without consideration or authority, but the contrary, for J. P. Bennett, as the agent of his wife, had no authority to make a note for her to pay his own debt, any more than a partner, who is in law only agent for his firm, could make a firm note to pay his individual debt. It was proved in behalf of the defendant that she was not indebted to Mr. or Mrs. Wells, and that the note was given without any consideration, and without her authority. This put upon the plaintiffs the burden of showing that they took the note from Wells without knowledge or notice of such lack of authority. Daniel, Neg. Inst. § 369; Bank v. Gilliland, 23 Wend. 311; Bank v. Monteath, 26 N. Y. 505; Bank v. Cameron, 7 Barb. 143; Wilson v. Railroad Co., 120 N. Y. 145, 24 N. E. 384. This burden was not met. Judgment for defendant.

(22 Misc. Rep. 682.)

MOLONEY v. TILTON et al.

(Supreme Court, Special Term, New York County. November, 1897.) 1. TRUST-VALIDITY.

An instrument expressing all the elements of a valid trust, with power of sale, was duly executed, acknowledged, and recorded, but held by the grantor, who made himself trustee. The beneficiaries, after the execution of the trust, became the wife and stepson, respectively, of the grantor, and resided with him on the premises. The grantor kept secret, as to the bene

and 85 New York State Reporter.

ficiaries, the existence of the trust. After 16 years he sold the property, turning over the trust deed with the title papers, under circumstances which showed an intention to avoid the effect of the trust. Held sufficient to evidence the creation of an irrevocable trust.

2. SAME-KNOWLEDGE OF BENEFICIARIES.

To create a valid trust, it is not essential that the property should be actually possessed by the cestui que trust, nor that the latter should be informed thereof.

3. SAME-FOLLOWING TRUST PROPERTY.

A declaration of a trust contained a power of sale, the proceeds of which were to be applied for the benefit of the beneficiaries. The property was conveyed to one who had knowledge of the trust and the purpose of the trustee to convert the proceeds. Held, the purchase was not in good faith, and the property would still be held by the trustee subject to the trust. 4. SAME-NOTICE TO PURCHASER.

A deed of trust was recorded. The land was sold, and the deed of trust was examined by the attorney of the purchaser. Accompanying the deed of trust was a letter to the purchaser in regard thereto. Held sufficient to put the purchaser on notice of the infirmities of the title.

5. SAME.

A purchaser, knowing of the purpose of the trustee to deal with the proceeds in contravention of the trust, cannot vindicate his title by plea of ignorance of the trust deed.

6. LIMITATIONS.

The plea of limitations is ineffectual to a defendant who has continually resided without the state.

Action by Matthew S. Moloney, Jr., against Charles E. Tilton and others. Judgment for plaintiff.

Esek Cowen, for plaintiff.

Nelson S. Spencer, for defendant Tilton.

BEEKMAN, J. On or about April 28, 1864, one Matthew S. Moloney purchased from one Philip Milspaugh the premises known as No. 81 Amity street, in this city. Immediately upon the delivery of the deed, which bears the above date, Moloney executed a declaration of trust with respect to said property out of which this controversy arises. The instrument bears even date with the deed from Milspaugh, and recites that conveyance. By its terms Moloney declares that, in consideration of the sum of $6,500 to him in hand paid, it is not stated by whom, the receipt of which he acknowledges, and for divers other good considerations to him moving, he holds, and will at all times hold and stand possessed of, the property in ques tion, upon the following uses and trusts, namely: To collect the rents, issues, and profits, and after payment of taxes, assessments, repairs, insurance, and all other necessary and lawful expenses, to apply the net income to the joint use of Mrs. Nancy L. Blackburn and her son, Charles Blackburn, during their joint lives and the life of the survivor, and, upon the death of the survivor, in trust to grant and convey said house and lot, or pay over and transfer the proceeds thereof to the issue, if any, of said Charles Blackburn, then living. If there should be no such issue then living, the settlor reserves the estate to himself, if he should then be living, in default of which, however, certain limitations over are made, to which it is unnecessary here to refer. A power of sale is created in the following words:

"And upon the further trust, in case I or my successor or successors shall deem it advisable to sell said house and lot, either at public or private sale, and invest the proceeds in bonds secured by mortgage or improved unincumbered real estate, or in United States or state stocks or securities, and the same to reinvest." The settlor reserved from the grant during his lifetime, for his own use and benefit, or that of such person as he might from time to time appoint, two rooms, which he designated, and part of the cellar and back yard. In case of his death before the completion of any of the trusts so created, he directs his successor to be appointed by the supreme court of the state of New York on the application of any person interested. The instru ment was signed and sealed by the settlor, in the presence of a subscribing witness, was acknowledged by him before a commissioner of deeds on May 23, 1864, and on the same day was recorded in the office of the register of the city and county of New York.

On or about July 31, 1880, Moloney executed and delivered to the defendant Charles E. Tilton a deed bearing date on that day, by which, in consideration of the sum of $8,000, he assumed to convey said premises to Tilton. This instrument is in form a full-covenant warranty deed, and purports to be a conveyance of an absolute title by the grantor in his own right. No reference of any kind is made to the declaration of trust or to the power of sale therein, nor is the grantor described as trustee. In short, the deed is exactly what it should have been had the trusts above referred to never been created. Tilton · thereupon took possession of the property, and has continued to exercise rights of ownership over it ever since, claiming title thereto under the above deed. On February 1, 1896, Moloney died, and shortly thereafter this action was instituted by Matthew S. Moloney, Jr., who, under a change of name, is the same person described in the declaration of trust as Charles Blackburn, one of the beneficiaries thereunder. The theory of the action is that the conveyance made by Moloney to Tilton was in contravention of the trust, of which fact Tilton was affected with notice; that the latter should be decreed to have held the property upon the trusts declared; that a new trustee should be appointed, to whom Tilton should be required to transfer the property, and also to account for the use and occupation, rents, income, and proceeds of the same since he took possession, in 1880.

It appears from the proofs that for some time after the purchase of the property by Moloney and the execution of the declaration of trust he occupied the premises with Nancy J. Blackburn and Charles Blackburn, then a child of about seven or eight years of age. On August 11, 1864, a little over two months after the execution of the trust instrument, Moloney married Mrs. Blackburn, and thereafter the boy Charles, the plaintiff in this action, assumed the name he now bears, and was treated by the elder Moloney as his son. It is unnecessary to inquire any further into their relationship. It is sufficient for the purposes of this action that it clearly appears from the proofs that the plaintiff and the Charles Blackburn referred to in the deed of trust as the son of Nancy J. Blackburn are one and the same person.

and 85 New York State Reporter.

It now becomes necessary to consider the grounds on which the defendant Tilton resists this action. It is contended, first, that the declaration of trust was inchoate and incomplete, and that the proofs are insufficient upon which to rest a finding that the settlor intended that the deed should take effect and become operative upon its execution. In support of this contention the defendant largely relies upon evidence tending to show that Moloney, the settlor, kept all knowl edge of the trust from his beneficiaries, and apparently dealt with the property as if it were his own. It is certainly true that the plaintiff never knew of the trust until the year 1895, when the defendant sought, through his intervention, to obtain a confirmatory deed from the father. That the settlor had deliberately adopted a policy of silence upon the subject towards his beneficiaries is sufficiently indicated in the letter which he wrote in 1880 to the defendant Tilton, when a sale of the property was under consideration, which contains the following statement: "No one in our family knows of this declaration of trust of mine, and never will if the sale is made before I die." Accompanying this letter were what the writer described therein as the "title papers in full" of the property, and among them was the original declaration of trust. I shall have occasion to refer to this letter in another connection, but, so far as it is relied upon as evidence of an original unexecuted intention to create the trust, it is of little value. Assuming that a declaration, made by a person situated as the settlor was with respect to this property some sixteen years after the execution of the deed, is competent evidence against those claiming under it, the declaration so made is quite consistent with the integrity of the trust in its original creation. The settlor does not repudiate it as an imperfect act. On the contrary, he transmits the original deed embodying the trusts declared with his other muniments of title for the use of the purchaser.

It will be remembered that the declaration of trust contained a full power in trust to sell for purposes of investment, so that considering this with the fact that the declaration had been recorded and was transmitted to the defendant Tilton, as a paper through which title was to be made, there can be little doubt that Moloney expected to tender a title under this deed, but with the further intention, which he communicated in his letter to Tilton, of dealing with the proceeds in a manner which in contemplation of law amounted to a breach of trust. It becomes important in this connection to note the fact that Moloney and Tilton were intimate friends, and had also some business relations with each other. When the above letter was written, Tilton was endeavoring to sell the property for Moloney. His own purchase of it was an afterthought, and was subsequently agreed upon, apparently to oblige Moloney, when it was found difficult to effect a sale owing to the dullness of the real-estate market. These facts serve to explain the frankness with which the writer disclosed his attitude towards the trust and his purposes with respect to it.

We have, then, an instrument expressing in appropriate form all of the elements of a perfectly valid trust. It was duly executed, acknowledged, and recorded. It was retained by the settlor for 16 years after it had been executed, and was then turned over, with other