Sec. 207. Trustees, Executors, And Guardians (P. 217) At End Of First Paragraph Add Footnote 21a As Follows:

See also Matter of Bielby, 91 Misc. 353; 155 N. Y. Suppl. 133 (1915).

Although the broker knew his employer was assuming to act purely as executor, the action may properly be brought against the employer personally. The latter had no power to bind the estate by such a contract. "The general rule is well settled in this state that executors or trustees cannot, by their executory contracts, although made in the interest and for the benefit of the estate they represent, if made upon a new and independent consideration, bind the estate and thus create a liability not founded upon the contract or obligation of the testator." 18

A trustee who pays a commission on the sale of the real estate of the trust estate, will be allowed such payment on the settlement of his accounts.19 The same is true of an administrator.*0

15 CherrinKton v. Burchell. 147 App. Div. 16; 131 N. Y. Suppl. 631 (1911); Weil v. Ravmond, 142 Mass. 206; Pittsburgh Plate Glass Co. v. Roquemore, 88 S. W. 449; Central Lumber & Mig. Co. v. Reyburn Co., 189 Mo. App. 405; 176 S. W. 509 (1915).

16 Cherrington v. Burchell, supra.

17Title Guarantee & Trust Co. v. Sage, 146 App. Div. 578; 131 N. Y. Suppl. 278 0911). See also Echols v. Howard (Ga. App.) 86 S. E. 91 (1915).

18Smith v. Peyrot, 201 N. Y. 210, 215; 94 N. E. 662 (1911).

But such amount paid for broker's commissions should be charged against the principal of the estate if there are persons to whom the income only of the estate is directed to be paid.-1

Where real estate is devised to executors under a good trust and they are, as such trustees, directed to sell the same, the question arose whether an amount for broker's commissions, though not yet incurred, should be deducted from the assets of the estate in arriving at the net amount of the estate for the purpose of imposing an inheritance tax. An able judge has held that, if it shall appear that the expenditure for broker's commissions is reasonably to be required, the amount thereof should be deducted. "The sole question is whether or not it can be found as a fact that the executors are about to incur a necessary expense on the sales which they may be required to make under the will

Sec. 207a. Corporations (P. 218)

Acts done by the executive officers of a corporation within the apparent scope of their authority in the regular business of the corporation are assumed to be its acts, and one dealing with such officers is not required to prove that they were given specific authority from the board of directors. But where a corporation is engaged in the business of renting lands, the sale of all its tangible property is not within the apparent scope of the business, and one seeking to recover commissions for procuring a purchaser must prove either that the officers were given authority to employ him or that their act was subsequently ratified. And thus it has been held that, where a broker suing for commissions has given evidence that the officers of the corporation, acting in its name, employed him to find a purchaser for all of its tangible property and that the property was actually sold to a customer procured by him, the burden is upon the defendant to show that its officers had no authority to employ the plaintiff and that the act of the officers was not ratified.23

In like manner, it has been held that the president and actual general manager of a corporation engaged in selling land was acting within the scope of his authority in employing a selling agent, and agreeing that the corporation would pay for his services, though no resolution had been passed appointing him general manager.24

19See Matter of Odell, 164 App. Div. 929; 149 N. Y. Suppl. 435 (1914); affd., 214

20 In re Willard's Estate. 139 Cal. 501; 73 Pac. 240; 64 L. R. A. 554 (1903); see the note in L. R. A. last cited; cf. Jacobs v. Jacobs, 99 Mo. 427; 12 S. W. 457.

21Matter of Fargo, 72 Misc. 305; 125 N. Y. Suppl. 156 (1911).

22Matter of Shields, 68 Misc. 264; 124 X. Y. Suppl. 1003 (1910)

23Lyon v. West Side Transfer Co., 132 App. Div. 777; 117 N. Y. Suppl. 648 (1909). Two of the 5 judges dissented.

But where the directors of a corporation employed a broker on the express condition that any proposition submitted by him should be approved by the board before he should be entitled to commission, there can be no recovery of commissions in the absence of such approval.25

Where it is alleged that the broker was hired by the president of a corporation, and the brokerage employment was for the sale of real estate, and thus related to a transaction entirely outside of the scope and purposes of a manufacturing corporation, the president cannot bind the corporation for the broker's services simply because he was its executive officer. The president's authority to act for the corporation is limited by the legitimate scope of its business as defined by its charter, and it can never be presumed that an officer of a manufacturing corporation has authority to transact business which the corporation itself is not authorized by its charter to transact, and persons dealing with a corporation are bound to take notice of the limitations upon the powers of their agents. And so, should a president of a manufacturing corporation assume to make an agreement in behalf of his corporation to hire brokers to sell his individual real estate, he could not bind the corporation by such action, for it is not within the apparent scope of his authority as president of such company. Or should the president of a manufacturing company state to a broker that certain real estate belonged to the corporation, there would still be no ground for the broker to stand upon, for it is not within the apparent authority of a president of a manufacturing corporation to sell its plant and machinery. If a plant is a part of a manufacturing equipment of a corporation, it is not within the apparent scope of the authority of the president of the company to sell the same, and, as it is not, there can be no presumption that a person holding the office of president is acting for a corporation in hiring a broker to sell the same.26

Where an employee of a steamship corporation is designated as its general manager, and a person would have the right to assume that any contract with respect to the transportation business of the company was within the authority of such general manager,27 yet a broker would have no right to assume that such general manager had authority to employ him to negotiate a sublease of a lease the corporation held.28 The question is not with respect to the authority such general manager assumed to exercise, but with what appearance of authority the corporation clothed him.29 If the corporation, with knowledge that its general manager employed a broker, accepts a customer produced by him, and makes a contract on a proposition which he was authorized to submit, it would be bound by the employment on the theory of ratification,30 but if the general manager is not authorized to employ a broker, the corporation is not chargeable with any knowledge possessed by the general manager and not communicated to any officer of the corporation and if no officer has actual knowledge, the corporation cannot be held on the theory of ratification for having accepted the fruits of the broker's services.31

24Hoffman v. Guy M. Rush Co., (Cal. App.) 149 Pac. 177 (1915).

25Roberts v. New & Beaver St. Corp., 138 App. Div. 47; 122 N. Y. Suppl. 989 (1910).

26 McCorry v. Wiarda. 149 App. Div. 863; 134 X. V. Suppl. 667 (1912).

27Citing Rathbun v. Snow, 123 N. Y. 343; 25 N. E. 379; 10 L. R. A. 355; Sistare v. Best, 88 N. Y. 527; Norton v. Genesee Nat. Savings Assn., 57 App. Div. 520; 68 N. Y. Suppl. 32.