107 Misc. 12 | N.Y. Sup. Ct. | 1919
These actions are brought to foreclose three mortgages and involve the same principles. The first action is for the foreclosure of a mortgage given to secure the payment of the principal sum of $7,500, bearing date February 13, 1909, made by the defendant Anson 3. Johns and wife to the Home Title Insurance Company, and' recorded on February 16, 1909, in the register’s office of Kings county. This mortgage and the bond accompanying the same came through various mesne assignments to the plaintiff, Union Trust Company of Lancaster, Penn., by assignment dated March 10, 1913, and recorded March 11, 1913. The complaint alleges that there is due to the plaintiff the sum of $7,500 of principal, with interest thereon from February 1,1913. The second action is for the foreclosure of a mortgage given to secure the .payment of the principal sum of $12,000, bearing date April 12,1909, made by the defendant Anson 3. Johns and wife to the plaintiff, Union Trust Company of Lancaster, Penn., and recorded in the said register’s office on April 19, 1909. The complaint alleges that there is due to the
The defendant Anson S. Johns alone answered. By his answer he alleged as a defense that the principal of the several mortgages was not due because the time for the payment thereof had been extended, and as to the mortgage held by the plaintiff Hoffman, he alleged that said mortgage and the bond accompanying the same were in reality owned by the plaintiff Union Trust Company of Lancaster, Penn. He further alleged as a defense that the mortgaged premises were part of a tract of land which had been conveyed to him in June, 1904, by the Brighton Beach Racing Association, and that there were several mortgages upon said tract, including the three mortgages involved in these actions. He .further alleged that by a deed dated April 28, 1909, and recorded in the said register’s office on April 29, 1909, he, with his wife, conveyed the larger tract to the plaintiff Union Trust Company of Lancaster, Penn., as trustee; and furthermore, that by an agreement bearing
It will be observed that as to the mortgage for $12,000, made directly to the Union Trust Company of Lancaster, Penn., it is recited and its payment is provided for in the trust agreement. The mortgage for $7,500 is one of the four equal lien mortgages on different parts of the property which aggregate the sum of $30,000 of mortgage indebtedness referred to in the agreement. The mortgage for $10,000 is also one of the mortgages making up the aggregate of $30,000 referred to in the trust agreement.
It is the contention of the defendant Johns that the deed and agreement which he made to and with the Union Trust Company created a valid express trust under section 96 of the Beal Property Law, subdivision 1, “ To sell property for the benefit of creditors,” and such being the case, that it was not competent for the trustee, having entered upon the discharge of the duties of his office or trust, to acquire outstanding claims against the property held in trust for the purpose of enforcing them against the trust estate and thereby destroy the trust. On the other hand, the plaintiffs claim that there was no express trust, but a mere power in trust created by the deed and agreement. And in support of their contention they have cited the case of Cooke v. Platt, 98 N. Y. 35, 38, where it is said: “The statute authorizes a trust to sell lands for the benefit of creditors and legatees (§ 55). But we are of opinion that it is essential to the constitution of a valid trust for either of these purposes that the power of sale conferred upon the trustees
There is nothing in the record to show why the trustee has refrained for so long a time in disposing of the property conveyed to it, and in winding up the trust, but, whatever the motive may have been, or whatever the conditions of the real estate market
These views find support, if any were needed, in the opinion of Chancellor Kent, in the case of Hawley v. Mancius, 7 Johns. Ch. 174, a case having many features in common with the instant cases, although not referred to in the briefs submitted. What has been said concerning the mortgages held by the Union Trust Company of Lancaster, Penn., applies also to the mortgage held by Mr. Hoffman, the president of that company. He should not, in the light of his relationship to the company and his knowledge of the situation concerning the property which he manages, as president of' the trustee, be regarded as occupying toward the trust property and the beneficiary a different situation from that occupied by the corporation plaintiff. Judgment will be rendered in accordance herewith, but without costs.
Judgment accordingly.