Mott v. New York Security & Trust Co.

52 A.D. 623, 65 N.Y.S. 190

Opinion

Goodrich, P. J.:

Mr. Justice Stover has writtenafull and elaborate opinion, hereto appended,

* setting out the allegations of the complainfc, which allegations need not be repeated here. We concur in his conclusions and in his reasons therefor. But as the apnellant’s counsel earnestly argued that the learned justice misconceived the plaintiff’s theory of the action, it is proper that this contention should be considered: He refers to the sentence of the opinion in which it was said that “the theory of the plaintiff is that, by the agreement of May, 1899, the defendant trust company was constituted a trustee for the benefit of the bondholders of the Huntingburg road, and that the Hunting-burg bondholders thereby acquired certain vested rights in and to the bonds issued under .the agreement, which may be enforced - against the trustee and the grantor,” and says that he does not contend that the plaintiff’s right accrued directly from the consolidafcion agreement, as that was carried out and completed, but out of what was actually done in pursuance of the agreement, viz., the actual delivery of the new bonds to the New York Security and Trust Company, for the plaintiff’s benefit, and that the security companyhas no interest in the bonds except to fulfill its duty as trustee. The justice stated that he based his decision upon •“ a fundamental •ground, going to the very root and core of the plaintiff’s contention — namely, that under tne agreement of consolidation no right of action was conferred upon the bondholders of Huntingburg road, and that they were not cestuis. que trust for whom and in whose behalf a court of equity could intervene.” While he did not discuss the effect of the deposit of the bonds with the security company as constituting it a new trustee for the plaintiff, and imposinguponitthe.dutyof delivering to him new bonds in exchange for the old, the question was really involved in his conclusion that the plaintiff acquired no-rights as cestui que trust to enforce the delivery or the bonds to him until all of the provisions of the consolidation agreement as-to the entire amount of the bonds had been fulfilled and the original mortgage on. the Huntingburg road had been canceled, and. that the trustees of the original mortgage on that road would be necessary parties in an action for that purpose. If the justice’s conelusions are correct the plaintiff’s right of 'action must have been derived from and through the consolidation agreement, and the delivery of the bonds to the security company'conferred no new right of action, upon the plaintiff. It is proper to say that since the interlocutory judgment was entered in this action, Baker, District Judge, in the United States Circuit Court, district of Indiana (New York Security & Trust Co. v. Louisville, E. & St. L. Consol. R. Co., 97 Fed. Rep. 326) has had the consolidation - agreement under consideration, and held that it gave individual holders of bonds of one of the constitutent companies no right to compel the delivery to them severally of bonds of the consolidated company in exchange for their holdings. His opinion on this subject coincides substantially with the views expressed by Mr. Justice Stover. The interlocutory judgment should be affirmed, All concurred.

This opinion has been reported in 29 Miscellaneous Reports, 39, and, therefore, is not published here.—[Rep.