presence of the agent, as e. g. a bank director at the meeting where the transaction was concluded was said not to be of importance. The same view was followed in Allen v. South Boston R. R. Co., 150 Mass. 200, 15 Am. St. Rep. 185, and Corcoran v. Snow Cattle Co., 151 Mass. 74. See, also, to the same effect, Barnes v. Trenton Gas Light Co., 27 N. J. Eq. 33; Winchester v. Baltimore etc. R. R. Co., 4 Md. 231; First Nat. Bank v. Gifford, 47 Iowa, 575; Frenkel v. Hudson, 82 Ala. 158; 60 Am. Rep. 736; Third Nat. Bank v. Harrison, 10 Fed. Rep. 243, 252; Davis etc. Wheel Co. v. Davis etc. Wagon Co., 20 Fed. Rep. 699; ThompsonHouston etc. Co. v. Capitol etc. Co., 65 Fed. Rep. 341. And in Platt v. Birmingham Axle Co., 41 Conn. 255, it was held that the knowledge of the secretary of a prior assignment of stock, standing in his wife's name, could not be imputed to the corporation, to defeat the corporation's lien for subsequent advances to 837 the wife upon the same stock, and the decision does not seem to have been thought in conflict with First Nat. Bank v. New Milford, 36 Conn. 93, as no comment or reference was made to that case.

An instructive case is Atlantic Mills v. Indian Orchard Mills, 147 Mass. 273, 9 Am. St. Rep. 698. The same person was treasurer of two corporations, and fraudulently drew checks upon each in favor of the other when needed to balance his accounts and make his cash appear correct on examination. There had been also bona fide loans from each to the other, made in the same way. The court held that the account between them should be stated by charging each with the amount wrongfully transferred to it from the other, so that each should lose the exact amount taken from it by its treasurer acting in his capacity as such. This case was regarded by the learned referee in the court below as belonging to the class which imputes notice to the principal from knowledge of the agent, and the judgment could have been reached on that view. But the decision is put explicitly on the ground that "a party, even though innocent, cannot avail himself of an advantage obtained by the fraud of another unless there is some consideration moving from himself," referring to authorities as early as Lord Mansfield, and citing among others, Loring v. Brodie, 134 Mass. 453, 468. It is to be noted that this case, though leading to a different judgment, was not regarded in the subsequent decisions in 139, 150, and 151 Massachusetts, cited supra, as conflicting with them, and that the principle of it would result in the same judgment, though for a different reason, is that in First Nat. Bank v. Now Milford, 36 Conn. 93, and recercile that case not only with the later case in the same court. Plauk v. Birmingham Axle Co., 41 Conn. 255, but with the cases in the

class we are now considering. And the same principle would sustain First Nat. Bank v. Dunbar, 118 Ill. 625, and probably other cases in the class imputing notice to the principal from knowledge by the agent.

We are of opinion that the second class of cases have not only the preponderance of authority but of sounder reason. The rule that knowledge or notice on the part of the agent is to be treated as notice to the principal is founded on the duty of the agent to communicate all material information to his principal, and the presumption that he has done so. But legal presumptions ought to be logical inferences from the natural 338 and usual conduct of men under the circumstances. But no agent who is acting in his own antagonistic interest or who is about to commit a fraud by which his principal will be affected does in fact inform the latter, and any conclusion drawn from a presumption that he has done so is contrary to all experience of human nature. If it be urged, as in some cases, that the principal having put the agent in his place should, as a matter of public policy, be held answerable for all the latter does, a sound answer is suggested by the court in Allen v. South Boston R. R. Co., 150 Mass. 200, 206, 15 Am. St. Rep. 185, that an independent fraud committed by an agent on his own account is beyond the scope of his employment, and bears analogy to a tort willfully committed by a servant for his own purposes, and not as a means of performing the business intrusted to him by his master.

We have not found or been referred to any express authorities in our own state. The point was touched upon in Millward-Cliff Cracker Co's Estate, 161 Pa. St. 157, 167, and some observations of the learned auditor in that case seemed to be based on First Nat. Bank v. New Milford, 36 Conn. 93, and the line of decisions following it. But the facts show that the bank was endeavoring to retain an advantage and assert a claim founded on a fraud in which its own officer had participated, and the case therefore comes plainly within the rule adopted in Atlantic Mills v. Indian Orchard Mills, 147 Mass. 273, 9 Am. St. Rep. 698, which we think entirely sound. In Wilson v. Second Nat. Bank (Pa., Nov. 15, 1886), 7 Atl. Rep. 145, it was said per curiam, "the knowledge of Willcock as treasurer of the tool company cannot be imputed to the bank of which he was cashier, unless he revealed that knowledge to some one or more of its officers." The decision does not rest directly on that ground, but the expression shows that the views of the court were in harmony with those we now express. Even, therefore, if the present case be made to turn on the question of knowledge it was erroneously decided.

AM. ST. REP., VOL. LIX.-42

But we do not regard knowledge as the pivotal point of the case. Upon that point both parties would stand equal. Both might by mere inference be charged with knowledge, as the fraud was committed by an agent with authority to act for both, but in fact neither had or in the nature of things could have any knowledge at all, and neither was under any obligation to presume that its agent would be guilty of fraud. The real 339 question is, In what capacity did Jessup commit the fraud? And it is clear that it was as treasurer of the appellee. It was as treasurer he presented the notes for discount, and as treasurer he drew the checks for the proceeds. Both acts were within his authority as treasurer, and would have been lawful if they had been honest, but he drew the money on drafts which were the property of the company, and when he embezzled the money it was the money of the company. The bank had no part in his act, and gained nothing by it. The fraud had its inception and its consummation in acts done in his capacity of treasurer of the defendant company, and it should bear the loss.

Judgment reversed, and record remitted with directions to enter judgment for the plaintiff, for the full amount of his claim.

BANKS AND BANKING-CHECKS-SIGNATURE.-A bank is bound to know the signature of its depositors: First Nat. Bank v. Allen, 100 Ala. 476; 46 Am. St. Rep. 80, and note; First Nat. Bank v. Northwestern Nat. Bank, 152 Ill. 296; 43 Am. St. Rep. 247, and note. But it is not bound to know the handwriting in the body of an instrument: Monographic note to People's Bank v. Franklin Bank, 17 Am. St. Rep. 896.

AGENCY-NOTICE TO AGENT-WHEN NOTICE TO PRINCIPAL.-The rule that notice acquired by an agent while transacting the business of his principal is notice to the latter applies as well to banking and other corporations as to individuals, but, when the agent acts for himself and not for his principal, the rule does not apply: Merchants' Nat. Bank v. Lovitt, 114 Mo. 519; 35 Am. St. Rep. 770, and note; nor does it apply where the agent was acting for another principal, unless it first be shown that such knowledge was present in the mind of the agent at the very time of the transaction now in question: Constant v. University of Rochester, 111 N. Y. 604; 7 Am. St. Rep. 769, and note; nor where the agent is engaged in the commission of an independent fraudulent act on his own account and the facts to be imputed relate to this fraudulent act: Allen v. South Boston R. R. Co., 150 Mass. 200; 15 Am. St. Rep. 185, and note. AGENCY-PRINCIPAL - WHEN LIABLE FOR AGENT'S FRAUD. The principal is liable for his agent's fraud, tort, or negligence, though committed without the principal's participation or consent, if it is done in the course of his employment, and is not a willful departure from it: Johnson v. Barber, 5 Gilm. 425; 50 Am. Dec. 416, and note. As to third persons affected by the agent's acts or words, it is the apparent scope of his authority and not his actual instructions that must govern: Griswold v. Gebbie, 126 Pa. St. 353; 12 Am. St. Rep. 878, and note; Jarvis v. Manhattan Beach Co., 148 N. Y. 652; 51 Am. St. Rep. 727, and note.

FREEMAN'S ESTATE.

[181 PENNSYLVANIA STATE, 405.]

CONSTITUTIONAL LAW-CONSTRUCTION OF STATUTE -DUE PROCESS OF LAW.-The Pennsylvania statute of April 18, 1853, section 2, authorizing the court to decree a sale when property is held in trust, and one or more persons required to consent unrea. sonably withhold consent, is not unconstitutional as taking property without due process of law. It does not defeat or interfere with the individual rights of property different from or further than any other mode of changing the rights of joint owners to severalty or regulating the management until that is done.

TRUSTS-POWER TO SELL PROPERTY.-Power conferred upon a court by statute to decree a sale of property held in trust, when one or more persons required to consent unreasonably withhold consent, is properly exercised in a case of a lease of such property for a long term, which the trustees, empowered to lease without the consent of the cestuis que trust, treat as a sale for the purposes of the trust requiring the consent of such cestuis que trust to a sale of the trust property.

TRUSTS-POWER TO SELL PROPERTY.-Power conferred by statute upon a court to decree a sale, when property is held in trust and one or more persons required to consent unreasonably withhold consent, extends to a lease which is properly treated as a sale, and will double the net revenue of the property at once, with an increase in the future, and increase the value of the property by reason of improvements which the lessee is required to make.

Petition to lease real estate. H. G. Freeman left a will by which he devised to the Girard Life Insurance Annuity and Trust Company certain real estate to hold upon certain trusts; namely, to make sales of all or any part of such real estate at its discretion for the benefit of his estate, provided that no sale of any part of such real estate should be made without the consent in writing of the several cestuis que trust having any interest therein, and who at the time should be of lawful age and accessible; and further to make leases from time to time of such real estate; to collect, demand, and receive the rents, income, and proceeds thereof. On January 12, 1895, J. B. Freeman, one of the parties in interest, presented to the orphans' court a petition praying that the trustee might have leave to advertise for proposals to lease the trust property, upon an improvement lease, for a term not to exceed fifty years, the proposers to submit plans of the character of buildings to be erected, the amount of rent to be paid, the shortest term for which they would lease the property, etc. The proposed lease was objected to by parties representing a one-sixth interest in the property. The court made a decree authorizing the trustee to execute such lease, and the objectors appealed.

H. B. Freeman and I. N. Brown, for the appellants.

G. T. Bispham, S. Bainton, G. P. Rich, H. C. Boyer, P. R. Freeman, and J. E. Carpenter, for the appellees.

407 MITCHELL, J. The proposed lease is within the words of the testator's grant of power to the trustee to lease the property from time to time at its own discretion, but, considering the length of the proposed term in relation to the probabilities of life of the testator's children now living, the trustee and the court below preferred to treat the lease as practically amounting to sale, and therefore coming within the testator's restriction requiring the consent of all the cestuis que trustent of age and accessible. In so doing the trustee and the court displayed commendable regard for the equitable rights of the heirs, as well as for the security of the title to be passed to the lessee. No reasonable objection can be made to such action.

408 Treating the lease on the basis of a sale, the testamentary power of the trustee cannot be exercised for want of the unanimous consent of the heirs which the will required as a condition precedent, and resort was therefore had to the orphans' court under the act of April 18, 1853 (Pub. Laws, 503). The case falls within the express words of section 2 authorizing the court to decree a sale where property is held in trust and "one or more persons required to consent unreasonably withhold consent."

...

The constitutional objections to this statute raised by the appellants are not tenable. As applied to the case, the statute is not the divesting of estates of parties sui juris without their consent, but the regulation of joint rights where the joint owners cannot agree in the control and disposition of the property. It defeats or interferes with the individual rights of property no differently and no further than any other mode of changing their rights to severalty or regulating the management until that is done. The right of a joint owner is to an undivided interest in every portion of the joint property, but this right is accompanied with the ancient incident of partition. Each owner has the right to enlarge his estate to severalty, though in so doing he must reduce its corpus so that the other owners may also have the like privilege. The mode of doing this has always been within legislative control, and this statute does no more. There is no ques

tion even of retroactive application of the law, as the act was in force for more than twenty years before the death of the testator, who, as an experienced member of the Philadelphia bar, must be assumed to have written his will with the knowledge that the powers of leasing and sale which he gave his trustee could be supplemented, if occasion arose, by the powers of the orphans' court. The further argument that the testator only intended short leases, or at most those of ordinary length, would have much force if the trustee were acting on his own discretion under the