President & Directors of Manhattan Co. v. President

4 Edw. Ch. 315 | New York Court of Chancery | 1844

The Vice-Chancellor :

The question presented by the demurrer, upon the construction to be given to the trust of the assignment from Carnes to Satterlee of the ninth day of October, one thousand eight hundred and thirty-eight, under which both parties to this suit claim, is rather a difficult one to determine. The trust, as expressed, is susceptible of a meaning which would give to the complainants all that they claim by their bill; but, I think the true meaning is the one which the demurrer assumes, viz., that the trust was made solely for the benefit of the Greenwich Bank in the first instance, as a preferred creditor; and that the rents which the trustee should receive were not intended to constitute a trust fund applicable, at all events, to the keeping down of the interest on the mortgages and making it the imperative duty of the trustee so to apply it. The assignment was clearly intended to secure the debt of two thousand five hundred dollars to the Greenwich Bank. This appears to have been the leading object of the trust. The application of the rents to the taxes, assessments, interest on the mortgages and insurance, &c., is to be considered only as a power given to the trustee to be exercised according to his discretion for the purpose of preserving the property until he could effect a sale; but if the property should prove to be not worth preserving from a foreclosure and sale, as, it seems, that portion of it on which the complainants held a mortgage was not; then there was no obligation on the part of the trustee so to apply the rents. It does not appear from the bill that the complainants relied upon this provision in the assignment as a trust in their favor and forbore, in consequence, to proceed upon their mortgage or to take measures to intercept the rents upon the ground of an inadequacy of the security. Their remedy was that; and I am of opinion they have no right, now, to resort to this deed of assignment as containing any trust whatever for their benefit.

The demurrer must, consequently, be allowed and the bill be dismissed, with costs.