and 132 New York State Reporter note therefor indorsed by defendants Hampton and Stearns; and later in 1897 he loaned $1,800 more, taking therefor a note indorsed by defendant Stearns. Frederick A. Brown died, and Walston H. Brown was substituted as trustee, and in the years 1898 and 1899 he loaned from the trust fund to Cargill $13,200 more, upon two joint notes of Cargill, Hampton, and Stearns. The moneys were used by Cargill in establishing a ranch in California, which was owned by a corporation, and on the last loan to him he caused the corporation to give to the trustee a mortgage for the entire $35,000 which had been loaned to him. Walston H. Brown resigned as trustee, and this plaintiff was appointed in his stead, and an action was instituted in the superior court of the state of California for the foreclosure of this mortgage. Defendants Hampton and Stearns were made parties thereto, and judgment was asked against them for the full amount of the notes which they had severally signed or indorsed. They appeared, and interposed several defenses, including the statute of limitations, and on the 7th day of October, 1901, a judgment was rendered relieving them from liability as indorsers on the notes, aggregating $13,200 and interest. The real property was sold, and the proceeds of the sale applied, leaving unpaid of their liability thus established the sum of $3,435.80. On the death of trustee, Frederick A. Brown, and the appointment of Walston H. Brown as his successor, an accounting of the trust fund was had. In the account appeared the item “California ranch loat $21,800." All of the defendants signed an instrument duly acknowledged, ratifying, approving, and accepting the account containing this item, waiving every objection which might be made thereto, ratifying and approving the acts of the trustee therein set forth, and agreeing and consenting that, upon the turning over of the securities therein. mentioned to the substituted trustee, the estate of the deceased trustee should be fully absolved from liability, and his bondsmen discharged. When Walston H. Brown petitioned the Supreme Court to be permitted to resign, and that this plaintiff be appointed, he annexed to his petition a statement of the securities held by him belonging to the trust fund, and among them appeared "California ranch loan $36,350," being the $35,000 loaned by him and by his predecessor, in the manner specified, with accumulated interest. On this petition the court appointed a referee to take and state the accounts of the retiring trustee, and, on the coming in of such report, made an order directing all these defendants to show cause why such report, inventory, and account should not be confirmed, and why the then trustee should not be discharged, and his bond canceled. This order was duly served by publication and mailing on all beneficiaries, and, no one appearing in opposition, a final order was made confirming the report and approving of the account, and discharging the trustee and his bondsmen. There is no suggestion that every one connected with the estate did not understand that "California ranch loan" referred to the loan made to Andrew H. Cargill, and evidenced by his notes indorsed or signed by appellants, Hampton and Stearns. The referee found that the loan was made direct to Cargill, the trustee taking the notes referred to as security, and there is no proof that appellants, Hampton and Stearns, received any of the moneys. The appellants, Hampton and Stearns, conceded, except as hereinafter considered, their liability for the amount of the deficiency established by the California judgment; being the sum of $3,435.80. The judgment, from which they appeal, however, charges them with liability, notwithstanding they were relieved therefrom by the judgment in the California court, upon the $21,800 of notes, and directs that, after the share of Andrew H. Cargill shall have been exhausted in satisfaction thereof, their shares shall be charged with the deficiency, and impounded for its payment. The theory upon which this recovery was had, and upon which it is sought to be sustained, is that knowledge that the trustee was making an improper loan, and consenting that he do it, was sufficient to charge them with liability to their co-beneficiaries for the loss which resulted, although they received none of the money, and there was no fraud on their part, nor any fraudulent connivance to deplete the trust fund; and this, notwithstanding they had given their notes as security, which were accepted by the trustee, and which he permitted to outlaw as against them, and notwithstanding, also, the approval of the investment by the other beneficiaries, and the discharge by them of the trustees from any liability therefor. If the plaintiff is to be permitted to go behind the legal obligations which Mrs. Hampton and Mrs. Stearns gave in the form of notes, and disregard the amount which was adjudged to be due upon them by the California judgment, it must be upon the theory that they committed some wrong, with respect to the trust fund and towards their beneficiaries, which was not wiped out by that judgment, and which was not condoned or approved by the other beneficiaries themselves. On the facts established, we fail to see that they incurred any such liability. Eliminating all fraud, as we must, the worst light in which they stand is that they knew an improper loan was being made to Cargill, and assented to his receiving the money, and consented to sign his notes therefor, and thereby to bind themselves during the lifetime of the notes for repayment of the money. The loan was negotiated between Cargill and the trustee. They were asked to become liable on the notes as additional security. This amounted in law to no more than a forceful assent. The question is not one between a beneficiary and a delinquent trustee, where it is sought to charge him with loss upon an illegal or improvident loan. The present trustee did not make the improper loans; they came to his hands from the former trustees. If the delinquent trustee were accounting, undoubtedly Mrs. Hampton and Mrs. Stearns would be estopped from claiming that he should make good to them the loss arising from the improper loan, for he would have a right to say that they could not question its propriety because they consented to it. The rule of law between beneficiaries themselves is quite different from that existing between a beneficiary and a trustee. Residuary legatees are under no obligation to restore, in the absence of fraud or collusion, a trust fund which has been wasted by the executors. Mills v. Smith, 141 N. Y. 256, 36 N. E. 178. Counsel upon both sides concede their inability to find an authority in which the precise question is decided. After considerable research; the one nearest in point in principle seems to be Raby v. Ridelegh, 7 DeG. M. & G. 104. There two life tenants prevailed upon the trustees to invest the trust in an unauthorized security, in order to obtain an and 132 New York State Reporter increased income. A loss of principal arose. The trustees were charged by the vice chancellor with this loss, and the life tenants were held liable to reimburse them for the whole amount. On appeal this decree was modified, and the life tenants were held responsible only for such amount as the trustees had in fact paid over to them; the decision going upon the theory that there was no independent liability, but only one to restore that which they had received through the improper acts of the trustees induced by them. Ehlen v. Mayor, etc., of the City of Baltimore, 76 Md. 576, 25 Atl. 917, relied upon by the respondents, is not in point. There, four of the five beneficiaries had consented to the transfer of stocks held in trust and released to the trustees, and four-fifths of the funds realized had been thereby wasted. It was very properly held that the beneficiary who did not consent should take the one-fifth that remained. Our conclusion is that mere knowledge of, and consent to, an unauthorized loan by a trustee, on the part of a beneficiary, in the absence of fraud or collusion or the receipt of any of the money, is not sufficient to create a liability against him to reimburse his co-beneficiaries for such loss as may occur. But, if the rule be more stringent than we conceive it to be, there is another reason why the judgment cannot be upheld. The respondent defendants waived any objection which they might have had that the loan was not one authorized by law, or that it was improperly secured or improvidently made. They accepted the investments, and ratified the accounts of the deceased trustee, which included the $21,800 loan, and approved his acts, and released him from liability therefor by a formal instrument in writing. So, too, by failing to appear when the order was made discharging the retiring trustee, and to object that he had also made improvident and unauthorized loans, they must be deemed to have assented to the propriety of making them, and to have waived their illegality or the insufficiency of security. Parties of full age may arrange and settle and distribute an estate in which they are interested among themselves without any formal decree of the court, and such settlement and arrangement, in the absence of fraud or undue advantage, is binding. Matter of Wagner, 119 N. Y. 28, 23 N. E. 200; Matter of Hodgman, 11 App. Div. 344, 42 N. Y. Supp. 1004. A release to a trustee in respect to a breach of trust committed in the investment of trust funds operates as an acceptance of the securities in which the funds have been invested. Blackwood v. Burrows, 2 Con. & Laws, Rep. 459. A decree upon an accounting approving investments binds all parties to the proceeding, even though the investment be unauthorized by law. Matter of Denton, 103 N. Y. 607, 9 N. E. 490; Matter of Tilden, 98 N. Y. 434. A beneficiary may authorize his trustee to do what otherwise would be a breach of trust, or release and agree to hold him harmless for such an act after it is done. 2 Perry on Trusts (5th Ed.) § 851; Pope v. Farnsworth, 146 Mass. 339, 16 N. E. 262. The legal effect, therefore, of the ratification and of the order sanctioning the account of the retiring trustee was to make the investments, so far as the respondent defendants are concerned, legal and proper ones. It became the duty of the present trustee, as it had been the duty of the discharged trustees, to enforce their collection. To do this the plaintiff went to the courts of California, and upon issue joined it transpired that the plaintiff could obtain judgment against defendants Hampton and Stearns only upon the two notes aggregating $13,200, because the former trustees had permitted the statute of limitations to run against the prior notes. These former trustees had both been released, not only from any liability that might arise out of their improper investments, but for any negligence because of failure to enforce the obligations which they had taken. They were the primary debtors. The California judgment must be given due faith and credit, and by it is fixed the liability of the appellants, Hampton and Stearns, to the trust estate. The accounts of the trustees, which the defendant respondents accepted as true, stated that the liability was $35,000. On testing that question it was found to be only $15,000, and they are bound by that determination. It is insisted that the deficiency established against appellants, Hampton and Stearns, by the California judgment is not wholly principal of the trust fund, but is made up, in part, of interest belonging to the life tenant, and which she had waived. If this were the fact, it was incumbent upon the appellants to see that the judgment so provided. We think they are bound by the amount thereby established as principal due from them to the trust estate, and cannot now question its cor rectness. The court granted an extra allowance to the plaintiff and to the defendants appearing separately. The defendants were divided into groups, litigating against each other, and there is no reason why their counsel fees should be taken from the estate. The plaintiff was accounting, and the allowance to him was proper. In so far as the order appealed from grants an extra allowance to any of the defendants, it should be reversed. The judgment appealed from should be modified by providing that there be deducted from the shares of appellants, Hampton and Stearns, on account of the loan to Andrew H. Cargill, the sum of $3,435.80 only, with interest thereon from the date of entry of final judgment in the California action, and, as so modified, affirmed, with costs of the appeal to them, payable out of the estate. The order granting extra allowances should be reversed in so far as it grants allowances to the defendants, and affirmed as to the allowance to the plaintiff, without costs. All concur. (112 App. Div. 62) OZARK COOPERAGE CO. v. QUAKER CITY COOPERAGE CO. (Supreme Court, Appellate Division, Fourth Department. March 21, 1906.) CORPORATIONS-ACTION BY FOREIGN CORPORATION-COMPLAINT COMPLIANCE WITH STATUTE. A complaint by a foreign corporation alleging the execution of two contracts of sale between it and defendant, was not demurrable for failure to allege a compliance with Laws 1892, p. 1895, c. 687, § 15, requiring foreign corporations to obtain a license to do business in the state; the two transactions alleged not necessarily amounting to "doing business." [Ed. Note.--For cases in point, see vol. 12, Cent. Dig. Corporations, § 2520-2526, 2647.] 98 N.Y.S.-8 and 132 New York State Reporter Appeal from Trial Term, Erie County. Action by Ozark Cooperage Company against Quaker City Cooperage Company. From an interlocutory judgment overruling a demurrer to complaint, defendant appeals. Affirmed, with leave to defendant to plead over on payment of costs and disbursements. Argued before MCLENNAN, P. J., and SPRING, WILLIAMS, NASH, and KRUSE, JJ. James O'Malley, for appellant. SPRING, J. The complaint alleges that the plaintiff is a corporation organized in the state of Missouri, and with its principal office in the city of St. Louis in that state. It also alleges that the defendant is a foreign corporation, with a branch office and doing business in the city of Buffalo. It then alleges that a contract in writing was entered into with the defendant at Buffalo on the 17th day of June, 1904, whereby the plaintiff sold to the defendant 1,000,000 staves, for which the defendant agreed to pay a stipulated price for each 1,000 staves on delivery thereof at Buffalo. The complaint further alleges that the plaintiff, in pursuance of said agreement, delivered 185,000 feet of said staves, for which the defendant paid, but that the defendant has refused to receive the remainder of said staves, although the same has been tendered, and damages for the breach of such contract are sought to be recovered. For a second cause of action the complaint alleges that on the 15th day of July, 1904, another contract was executed by the parties in the city of Buffalo, for the purchase, sale, and delivery to the defendant at Buffalo of another specific quantity of staves. It further alleges a partial delivery and payment thereof, but a refusal on the part of the defendant to perform its contract by accepting the residue of said staves, and asks for damages for its breach. The essence of the demurrer to the complaint is that it fails to show that the plaintiff "has obtained a license to do business within this state," as required by section 15 of the general corporation law (Laws 1892, p. 1805, c. 687). We think the contention of the appellant is untenable. Section 15, referred to, prohibits a foreign corporation from doing business in this state "without having first procured from the Secretary of State a certificate that it has complied with all the requirements of law to authorize it to do business in this state"; and further, that "no foreign stock corporation doing business in this state shall maintain any action in this state upon any contract made by it in this state unless prior to the making of such contract it shall have procured such certificate." The statute is primarily a revenue measure, and intended to place a foreign corporation carrying on its business within the state on the same plane as a domestic corporation. Penn Collieries Co. v. McKeever, 183 N. Y. 98, 75 N. E. 935; Emmerich Co. v. Sloane, 108 App. Div. 330, 95 N. Y. Supp. 39. It is a rigorous measure, and should receive a reasonable interpretation, having in view the extensive interstate trade carried on, and the necessity of maintaining comity in business among |