There was no denial in the answer of any of these facts; defendants simply alleged that they had no knowledge or information sufficient to form a belief as to whether or not H. was at the time the action was commenced indebted to plaintiff in the sum mentioned in the complaint or in any other sum, and therefore deny the same." James M. Humphrey, for applts. John G. Milburn, for respt. Held, That defendants' answer was merely a denial of a legal conclusion and put in issue no fact alleged. Goodyear v. De la Vergne, 10 Hun, 537; Albro v. Figuera, 60 N. Y., 630, distinguished. of insurance in the Life Associa- | that defendants, though requested, tion of America; H. to collect had paid no part of the deficiency. premiums and remit them to plaintiff after deducting his commissions on the first day of every month, making a report at that time, and to regard and treat all the premiums that may at any time come to his hands, sacredly, as trust funds," and not to "use them, or permit them to be used, for any purpose except to remit them as aforesaid." The complaint further alleged the execution and delivery of a bond, required by the terms of the contract, signed by H. and also by the defendants B. and S., as sureties, conditioned for the faithful performance by H. of his duties as general agent "in accordance with the terms of the contract of ap- The referee found as a fact that pointment," and on the first day after the commencement of plainof every month account for and tiff's action against H. an order of pay over all moneys in his hands. arrest was made in that action and H.'s employment was, by the terms H. was arrested thereon and comof the contract, to continue for mitted to jail; that while H. was three years unless terminated by in jail plaintiff proposed that if he mutual consent. The complaint would give an offer of judgment then alleged that between the date for his demand in that action he of the contract and April 12, 1875, would release him from jail; that H. collected a large sum for which such offer of judgment was given he did not account and had not by H., and thereupon plaintiff repaid over upon request and ac- leased him from jail. The referee cording to the terms of the con- held that this did not operate to tract, "of all of which the defend- discharge the sureties. To this ants have had due notice." It was they excepted, and their counsel then averred that on May 7, 1875, now argues that the "order of plaintiff began an action against arrest with the arrest was a secu H., after notifying defendants of rity for the satisfaction of plainhis intention to do so, and of H.'s tiff's judgment to which security default, and in the following Oc- the sureties were entitled to be tober recovered judgment and subrogated, and the release of H. issued execution which was refrom imprisonment impaired their turned wholly unsatisfied, and rights. The sureties had never requested plaintiff to sue, or having sued to arrest H. and continue his imprisonment. Held, That the question raised stands only upon the bare relation of the parties as principal and surety. Flowing from that relation alone plaintiff was not bound to sue H. or to arrest or imprison him. The omission to do either invaded no right of the sureties. 28 How. Pr., 209; 14 Abb. Pr., 428. 66 Defendants offered to prove that after a part of the indebtedness claimed by plaintiff had accrued, and after H. had failed to perform his contract, the sureties notified plaintiff that they desired to with draw their bond and not be liable for any business that H. should do after that;" that to induce them so to remain liable plaintiff promised to require H. " to account monthly" and would see "that he did not get behind," but if he did he would immediately stop his business," notify the sureties and tell them the amount of the default; that in reliance on this promise and condition the sureties suffered their liability to remain, and that plaintiff did not perform the condition, but suffered the liability to increase until the whole sum now claimed had accrued. This evidence was rejected as immaterial and the sureties excepted. It is claimed that no such defense was pleaded. No objection was made on that ground. It is also claimed that the offer did not allege that the sureties knew of H.'s default when they had their interview with plaintiff, and that the offer did not aver that the liability of the sureties had been increased beyond the one additional default of which they took the risk. Held, That the court erred in rejecting the evidence offered; that if the offer was very general the objection to it was of the same character, and as the offer contained the elements of a possible defense it should not be construed too rigidly for the purpose of justifying its rejection. A surety bound for the fidelity and honesty of his principal, and so for an indefinite and contingent liability, and not for a sum fixed and certain to become due, may revoke and end his future liability in either of two cases, viz.: First, where the guaranteed contract has no definite time to run, and, Second, where it has such definite time, but the principal has so violated it and is so in default that the creditor may safely and lawfully terminate it on account of the breach. 45 N. Y., 691; 58 id.. 541; L. R., 13 Eq. Cas., 450; L. R., 7 Q. B., 666; L. R., 8 Exch., 73. When the person employed commits an act of dishonesty and is unfaithful to his trust the employer may end the contract and the trust for his own protection, and what he may do and ought to do for his own safety the surety may require to be done for his. Judgment of General Term, affirming judgment for plaintiff on report of referee, reversed and new trial granted. Opinion by Finch, J. All coucur, except Earl, J., not voting. INSURANCE COMPANIES. PUBLICATION. N. Y. SUPREME COURT. GENERAL TERM. SECOND DEPT. real estate as should be purchased at sales upon judgments obtained on mortgages for security for loans. But the same law also provided that all real estate so ac The Home Ins. Co., plff., v. quired which should not be neces Mary Head, deft. Decided Sept., 1883. The failure of an insurance company to pro cure a certificate of the Superintendent of the Insurance Dept. under Chap. 466, Laws of 1853, within five years after the acqui sition of title to real estate will not invalidate its title. To constitute a valid service by publication on an infant it is not necessary that the papers should also be served on the father, mother or guardian. sary for the company in the transaction of its business should be sold and disposed of within five years after the acquisition of title thereto, unless the certificate of the Comptroller, for whom the Superintendent of the Ins. Dept. is now substituted, Chap. 366, Laws of 1859, that the interest of the company would suffer materially by a forced sale thereof should be obtained. The act does Submission of controversy with- not assume to divest the title of out action. Plaintiff contracted to sell certain real estate to defendant, who declines to perform, as she is apprehensive of defects in plaintiff's title. Plaintiff foreclosed a mortgage on the premises in question and upon the sale they were bought in for and were afterwards conveyed to plaintiff in Dec., 1876, and it has held the same from that time without the certificate of the Superintendent of the Ins. Dept. until April 12, 1883, when a proper certificate was obtained. It is claimed that the failure to obtain a certificate for five years in validated plaintiff's title. Barney & Cowman, for plfi. B.S.Morehouse, for deft. Held, That plaintiff's title was unaffected by the omission to procure the certificate. Chap. 466, Laws of 1853, made it lawful for insurance companies to hold such the company or suspend its power of sale after that time. It simply imposes on the company a duty to sell within five years or procure the certificate. No penalty is attached for disobedience, and no negative words forbidding or prohibiting the sale thereof are used, and as neither such penalty nor prohibition are expressly imposed or created they cannot be raised by implication. 70 N. Y., 536. The title to this property was absolute in the company, and its power of alienation was without limit. A power of sale bestowed upon trustees or other parties may be limited in its exercise by time or events, but no such limitation can be imposed by the legislature on the owner. Such an attempt would be a plain usurpation of the right of property. The intention of this law was, doubtless, to impose on the companies a duty to dispose of its real estate not necessary for the transaction of its business as soon after its acquisition as was consistent with its interests, the object being to prevent the accumulation of land by companies or ganized for the purpose of insur ance. The summons and complaint in the foreclosure action was served on one of the defendants, a nonresident infant under 14 years of age, by publication in two newspapers and deposit of a copy in the postoffice, directed to said defendant and prepaid. No copy was sent to her father, mother, or guardian, and no personal service was made the service by mail being the only service made or at in the effect and character of the judgment. In such case the defendant, or her representatives, on good cause shown, may be allowed to defend within one year after notice of judgment, and within seven years after its rendition, on such terms as may be just. The practice prescribed was followed strictly, and the judgment obtained was regular. No defect exists in the title. Judgment ordered for plaintiff for specific performance. Opinion by Dykman, J.; Barnard, P. J., and Pratt, J., concur. REFERENCE. MISTAKE. LACHES. tempted. A guardian ad litem N. Y. SUPREME COURT. GENERAL was regularly appointed for the infant, and put in the usual an swer. Held, That the Court acquired jurisdiction over said defendant; that $135, Code Pro., contains no requirement that the papers shall be sent to any person other than the infant in case of publication, and that there is no reason why they should be. No distinction is made in this section between infants and adults, and it follows that a strict pursuance of the statute is sufficient to confer jurisdiction of either class of persons. It is within the competency of the legislature to prescribe the mode of acquiring jurisdiction of the person, and one mode is by publication. The reason why the same particularity is not required where the infant is served by publication and deposit is to be found TERM. FOURTH DEPT. Oris Knapp, admr., respt., v. Jeremiah Fowler, applt. Decided Oct., 1883. A referee has co-extensive power with the court to allow amendments of a pleading. Contributory negligence will not defeat an action based on misrepresentation and mistake. Appeal from judgment on referee's report. Action to rescind a conveyance of real estate made by plaintiff's intestate to defendant. The action was begun by plaintiff's intestate, and he having died since the trial the present plaintiff has been substituted. The real estate was sold January 18, 1881, at the price of $3,000, and the vendor took in payment a bond and mortgage executed to defendant by B. for $3,000, with interest, on which | Held, That the referee had power to allow the amendment. His power in that respect was coextensive with that of the court, Code Civ. Proc., § 1018, and the court may allow any amendment of a pleading, by conforming it to the proof, which does not change substantially the claim or defence. Id., § 723. The case is eminently one for the exercise of the power of amendment. 4 Lans., 41. The old chancery rules on this practice, 4 Johns. Ch., 363; 2 Barb. Ch., 395, are done away; and the matter is one of discretion within the limits prescribed by the Code. was then unpaid the whole princi- eree heard further proofs, and pal sum and some interest, for made his report, by which he which interest the intestate gave found a mutual mistake as alleged his note to defendant, which he in the amended complaint, and afterwards paid. The original held that plaintiff was entitled to complaint alleged that intestate a judgment of rescission. From was induced to take the securities that judgment defendant appeals. by certain false representations Defendant testified that he supfraudulently made by defendant posed the mortgage was "firstrespecting the pecuniary responsi- class;" that he "traded on that bility of the mortgagor, and the basis," and that he and plaintiff. property owned by him, and the "had the same idea about it." value of the property mortgaged. John Cunneen, for applt. The referee found the misrepresen- George Bullard, for respt. tations as alleged, but instead of fraud he found a mutual mistake of facts, and on that ground held that the intestate was entitled to a rescission. He reported that plaintiff was entitled to amend his complaint by conforming it to the facts found, upon terms, provided that on application to the court, on notice, such amendment should be confirmed, in which case plaintiff should then be entitled to enter judgment rescinding the sale, on the terms stated in the report. Thereupon plaintiff moved at Special Term to confirm the report and for leave to amend. The motion to confirm was denied, but the motion to amend was granted, and a new trial was ordered before another referee. Defendant appealed from that order, and the General Term reversed it and sent the case back to the referee to determine the same unconditionally, and to order such judgment as he should deem proper, after further hearing. 26 Hun, 200. Accordingly, the parties voluntarily appeared before the referee, who permitted plaintiff to amend. Then the ref Appellant insists that the intestate was precluded from recovering by his negligence in not examining the records of the County Clerk's office which showed that an execution against B. had been returned unsatisfied a few months before the sale. This position is not well taken. 44 N. Y., 525; 45 Barb., 478, affd. by Court of Appeals, May, 1870; 28 N. Y., 310; 77 id., 226; 87 id., 40. Penny v. Martin, 4 Johns. Ch., 566; Marvin v. Bennett, 26 Wend., |