Conger v. Hudson River Railroad ( 1858 )

By the Court.^*—Hoffman, J.

—Section 321 of the Code provides, that in actions in which the cause of action shall, by assignment after the commencement of the action, or- in any other manner, become the property of a person not a party to the action, such person shall be liable for the costs, in the same manner as if he were a party, and payment thereof may be enforced by attachment.

The liability then of- any one who acquires the property in the subject of the action, after its commencement, cannot be greater than if he were the original party who instituted the suit. Section 317 is then applicable. We are to determine whether, had these parties brought the action, they would have been liable- for costs.

That section provides, among other things, that when an action is prosecuted or defended by a trustee of an express trust, costs are to be chargeable only upon the estate or fund represented ; unless the court shall direct the same to be paid by the plaintiff or defendant personally,' for mismanagement or bad faith in such action or defence.

If these parties are trustees of an express trust, they cannot be liable, unless the court had decided that they had been guilty of mismanagement or bad faith, which has not been determined.

It was held in Cunningham a. McGregor (5 Duer, 648),'that an assignee in trust to pay creditors, was a trustee of an express trust, and could not be charged personally, except upon the ground of mismanagement or bad faith, which was not there shown. The terms of the assignment do not appear in the report.

In the present case, the trust is primarily to pay all notes, bonds, or debts which Williams and Everett are bound to pay for the assignor, or have guaranteed. This creates a trust in favor of the holders of all such secured paper, which they could enforce. (4 Johns. Ch. R., 136.)

There, perhaps, may be a case in which the provisions of an assignment, though enuring for the benefit of others, render the subject of the action so fully the property of the assignee, as to bring the case within section 321. It is sufficient to say, that the present is not one of that character.

We think the order was erroneous, and must be reversed, but without costs. It is needless to discuss the other objections taken by the counsel of the appellants.

* Present, Hoffman, Slosson, Woodruff, and Pierrepont, JJ.