Shepard & Morse Lumber Co. v. Hurd

128 A.D. 28, 112 N.Y.S. 401, 1908 N.Y. App. Div. LEXIS 372

Opinion

Sewell, J.:

The argument of respective counsel in this case embraced a great many propositions it is unnecessary to consider. There is no dispute in regard to the regularity of the sale. It is substantially conceded that it was fairly conducted and in such a manner as to produce most nearly the full value of the property. The learned counsel for the appellant states in his brief that “'The trust company had a right, under its general authority, as holders

* of collateral to promissory notes payable to itself, to sell. The contention of the plaintiff has been, and is, that the trust company for its own private purposes had no right to buy in the bonds held by it as trustee except as trustee; that if it did buy in such bonds it bought them in subject to the trusts with which the bonds were previously impressed; it could not buy them in for its own benefit or take them or their proceeds in cash or property as its 'dwn property in any way, to the exclusion of the trust for plaintiff.”

As the plaintiff’s right to recover rests upon this proposition, it is unnecessary to consider any other.

■ The cases cited and relied upon by the plaintiff in support of this contention have not in my judgment any application to the facts of this case.

In those cases . the question considered and determined was whether a trustee could purchase the trust property which he was authorized to sell.

In the present case the defendant Franklin Trust Company had no duty to perform in relation to the bonds Which was inconsistent with the character of purchaser on its own account and for its own use.

A literal construction of the language of the agreement, by which it is claimed that a trust was created, would limit the duty or obligation of the trust company to any surplus or residue of the proceeds after a salé of the bonds and the satisfaction of its lien.

The word “ subject” is defined by lexicographers as meaning “ to make liable; to bring under the control or a'ction of; tohnake subservient.” As used in this instrument id plainly means, subject to the lien of the trust company and to all the terms of the contract of pledge, including the right to become a purchaser. -

That this was the intent and understanding of the parties is also apparent from the fact that the bonds were pledged to the plaintiff subject to the lien of the trust company, and it was agreed that the trust company should hold the bonds as trustee for the plaintiff, “ subject to and after satisfying therefrom all just claims of the said Franklin Trust Company.”

As there is nothing to indicate a different intention it follows that it cannot 'successfully be insisted that the trust company owed the plaintiff any duty or obligation in regard to the bonds, so long as its lien remained unsatisfied, or that any of its rights under the contract of pledge was affected by the agreement with the plaintiff.

I am, therefore, of the opinion that no wrong was done to the plaintiff by the sale or purchase of the bonds; that the sale vested the title in the trust company, and that the- judgment should be affirmed, with costs.

Judgment unanimously affirmed, with costs.

Sic.