Byers v. Union Trust Co.

175 Pa. 318 | Pa. | 1896

Opinion by

Mr. Justice Green,

We do not consider that there is any basis of liability on the part of the defendant to pay the claim of the plaintiff in this case. The defendant is the mere trustee of the mortgage given by the Elk Coal & Coke Company for the protection of the bonds issued by that company. None of the money derived from the sales of the bonds was received by the defendant, and no engagement to pay any of the bonds was made by it. It is claimed for the appellant that the certificate signed by the trustee, and printed on the bond, created a liability to pay the money due on the bond by the Elk Coal & Coke Company, because it contained an assertion that the mortgage was a first lien on the lands described therein and that this assertion was false. It is difficult to understand how this defendant would be liable even if the certificate contained such an assertion, but as it does not, there is not the least vestige of liability arising from it. The certificate is in these words, “ This bond is one of a series of bonds within mentioned and is secured by mortgage as therein déscribed duly recorded in Elk county.” The description referred to is that which is contained in the bond. Recurring to the bond we find it contains a recital that-each bond is one of a series of bonds comprising eighty in all, of $500 each, amounting to $40,000 in the aggregate. It recites further that the payment of the bonds is secured by a mortgage of even date upon the real estate, plant, improvements, leasehold interest and corporate franchises of the Elk Coal & Coke Company particularly described in the mortgage to the Union Trust Company as trustee, in trust to secure the full payment of the bonds as they fall due, “ to which mortgage reference is hereby made for a full description of the property mortgaged to secure the payment of the said bonds and interest and for the remedies afforded to enforce the collection of the same.”

Not one word is contained in the bond declaring, even by way of recital, that the mortgage is a first lien on the property, and as the bond only is referred to in the certificate, there is nothing upon which to found an allegation that the defendant undertook in any manner whatever to contract, or guarantee or represent, that the mortgage was, or was to be, a first lien. But the plaintiff’s case is worse than this. Not even the mortgage itself contains any covenant or guaranty that it is, or was intended to be, a first lien, and hence it would not be possible to imply an undertaking or assertion of that character from the reference to it made in the bond. The only matter contained in the mortgage on this subject is a recital of a resolution, passed at a meeting of stockholders of the Elk Coal & Coke Company, that the mortgage was to be a first lien, but as in point of fact it was not a first lien it simply follows that the board of directors, of which the plaintiff was one, did not perforin their duty in that respect. While the plaintiff might well be considered responsible for this failure of duty on his part, it is quite out of the question to hold the defendant responsible for the dereliction of the plaintiff, or of the whole board, in this regard. The case is entirely without merit in any point of view and the learned court below was right in sustaining the demurrer.

Judgment affirmed.