76 N.Y.S. 625 | N.Y. App. Div. | 1902
This does not appear to be a case in which there should be any relaxation of the rule that trustees, however numerous, constitute, in law, but a single person, the concurrence of all of- whom is necessary to the validity of any transaction involving the exercise of discretion. Cooper v. Railroad Co., 38 App. Div. 22, 26, 57 N. Y. Supp. 925, and authorities there cited. Some time prior to the commencement of this action Harris Cohen and Abraham Cohen, the owners of the property No. 10 Baxter street, New York City,, being desirous of paying a certain mortgage upon such property, and being uncertain whether the payment should be made to the plaintiffs in the present action, or to’ the defendant as substituted trustee under the last will and testament of Eliza Eisner, deceased, brought an action on January 3, 1901, in which all of the parties to the present action were defendants, praying for leave to deposit the principal and interest due upon said mortgage with the court, and praying that the parties to this action might be made to interplead concerning such fund. Such proceedings were had in said action that on hebruary 13, 1901, a final judgment and decree were made directing the deposit of $8,511.79 with the City Trust Company to the credit of this action, discharging the lien of the mortgage upon such premises upon such payment, and directing “the defendants, Jacob Fritz and Mary Fritz, as plaintiffs, and the City Trust Company of New York, as substituted trustee of and under the last will and testament of Eliza Eisner, deceased, as defendant,” to interplead concerning their respective claims to the fund in dispute. Pursuant to this decree the present action was commenced, and, being brought on for trial, has resulted
There is practically no dispute as to the facts in the case, and the question presented for determination is whether, if three trustees own a bond and mortgage executed to them as such, can two of them sell and assign such bond and mortgage without the consent or concurrence of the third trustee ? The court at special term has decided that they cannot, and we find no reason to differ in our conclusion from the decision of the special term. Joseph Stern, Julius H. Eisner, and Mark H. Eisner were trustees under the last will and testament of Eliza Eisner, deceased. As such trustees, on May 18, 1892, they took a bond and mortgage upon No. 10 Baxter street, New York City, from the then owners of the property, Isidore and Rebecca Abrahams; the bond and mortgage being taken in the names of the three trustees as such. On June 20, 1895, on the petition of Julius H. Eisner, one of the trustees, an order was made by the .surrogate of New York county enjoining Mark H. Eisner, the third trustee of and under the last will and testament of Eliza Eisner, deceased, from “acting in the premises in any wise until the matter in controversy shall be disposed of, and until the further order of the court.” This injunction was made in connection with an order to show cause why a permanent injunction should not issue, and was subsequently-vacated. Qn July 27, "1895, while this injunction was in full force, the plaintiffs, through one Hugo Cohen, as their attorney in fact, sought to purchase the above-mentioned bond and mortgage from the estate. Mr. Cohen called on Julius H. Eisner, at whose instance the order of injunction had issued; for the purpose of purchasing; the same; and it is conceded that Mr. Cohen paid to the said Julius. H. Eisner, as one of the trustees, the full amount of the mortgage, together with the interest which had accrued up to the day of the purchase, receiving the bond and mortgage, as well as an assignment in writing executed by Joseph Stern and Julius H. Eisner, two of the three trustees under the last will and testament of Eliza Eisner, deceased. It is conceded that, of the $8,322.86 paid by Mr. Cohen to Julius H. Eisner, $5,880.64 was actually paid to and received by the estate of Eliza Eisner, but the balance of $2,442.74 remains unaccounted for; and this sum is found to be due to the defendants as substituted trustees under the will of Eliza Eisner, deceased, together with interest from, the date of the alleged transfer.
The plaintiffs had notice of the fact that they were dealing with trustees, for the bond and mortgage were made to Joseph Stern, Julius Eisner, and Mark H. Eisner in their representative capacity. Mr. Cohen inquired at the time of the transfer why Mark Eisner did not join in the assignment, and was told that Mark was under an injunction, and that he was then in Europe. This, we think, was sufficient to put them upon inquiry; and, if they chose to purchase trust property under the circumstances, they must be deemed to have assumed the responsibility of the disposition of the funds. They come fairly within the rule that, where one of two' innocent persons must
Judgment affirmed, with costs. All concur, except HIRSCHBERG, J., who dissents.