In re Readjustment, Modification and Reorganization of the Rights of the Holders of Mortgage Investments

253 A.D. 895, 1 N.Y.S.2d 865, 1938 N.Y. App. Div. LEXIS 9161

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 4, 1938
• Status: Published

Opinion

Order of the Additional Special Term modified by adding a provision limiting it to the sixteen mortgage series in which the ten moving parties hold certificates, and by providing that John F. Doyle be removed as trustee in the ten mortgage series in which appellants hold certificates; and as so modified the order is affirmed, with ten dollars costs and disbursements to appellants, payable out of the trust estates in which appellants have an interest. It is admitted that respondent Doyle is a stockholder in the Hudson Harlem Valley Title & Mortgage Company. This stock interest places him in an inconsistent position. His duties as a trustee conflict with his interest as a stockholder. Under such circumstances he is disqualified from acting as trustee and should be removed. As to the other respondents, the proof does not show they occupy an inconsistent position or have an adverse interest. This proceeding must be limited to the mortgage series in which appellants hold certificates. Appellants are without standing or right to attack the election or qualification of the trustees in other series. (Matter of Westchester Title & Trust Company [ Kelly et al.], ante, p. 757; Brenner v. Title Guarantee & Trust Co., 276 N. Y. 230, 234, 237.) Lazansky, P. J., Carswell, Davis, Johnston and Adel, JJ., concur. Settle order on notice.