Citation Numbers: 24 N.Y.S. 39, 70 Hun 283, 77 N.Y. Sup. Ct. 283, 53 N.Y. St. Rep. 824
Judges: Brunt
Filed Date: 6/30/1893
Status: Precedential
Modified Date: 11/12/2024
In coming to a conclusion as to the correctness of the judgment rendered upon the demurrer, it will be necessary to bear in mind the peculiar allegations of the. complaint, which may be briefly stated as follows: That prior to and on the 2d day of July, 1880, one Edward Crane was the holder of certain stock of the New York, Boston, Albany & Schenectady Railroad Company, and of the New York & New England Railroad Company, and of certain first mortgage bonds of the Connecticut Western Railroad Company, and of the Lebanon Springs Railroad Company, and was the owner and holder of 235 shares of the capital stock of the New York & New England Railroad Company, and that, at the time aforesaid, said Crane, with one Carpenter and others, owners and holders of bonds and stocks of said railroad companies, united upon a plan to consolidate said railroads, and to that end and purpose a trust deed was executed, appointing the defendant as trustee, in and by which it was recited that the parties of the first part, viz. Carpenter, for himself and his associates, are the owners of certain securities, viz. the first mortgage bonds of the Boston, Hartford & Erie Railroad Company; the stock of the New York & New England Railroad Company; the first mortgage bonds of the Connecticut Western Railroad Company; the stock of the New York, Boston, Albany & Schenectady Railroad Company; and the first mortgage bonds of the Lebanon Springs Railroad Company,—and that, for the purposes of consolidation, said party of the first part agreed to assign and transfer to the party of the second part (the defendant) the various securities owned by them in said companies, to be held, voted upon, and used as in said agreement thereafter provided, and the defendant
The theory upon which this complaint is based seems to be that the plaintiffs in this action were adjudged entitled to receive the proceeds of the sale of said 235 shares of stock, which it is alleged that Crane deposited under this trust agreement. Upon an examination of the complaint, however, it will be seen that the allegations do not bear out any such construction. Whatever were the rights of the parties who deposited these stocks and bonds, they were fixed by the adjudication, in respect to all the parties thereto, in the action brought by the New Jersey Construction Company, which was then the holder of the certificates, against the defendant, the Farmers’ Loan & Trust Company, for the termination of the trust. As already seen, by that judgment certain stocks and bonds were to be returned to certain parties specified'in said judgment, and certain first mortgage bonds of the Connecticut Western Railroad Company (deposited by whom the complaint does not allege) and the said shares of the New York & New England Railroad Company, viz. those deposited by Crane, were to be sold to create a fund for the costs and expenses of the action, and the surplus after paying such costs was to be divided among the actual holders of the trust certificates issued therefor as aforesaid. Now, it nowhere appears in this complaint as to whx> deposited the first mortgage bonds of the Connecticut Western Railroad Company, or to whom certificates for such deposit were issued. The complaint alleges that a sale took place of the bonds of the Connecticut Western Railroad Company and the stock of the New York & New England Railroad Company, and that from such sale sufficient was realized to pay in full all costs,and expenses,, and that all said costs and expenses were thereby, and are, fully paid. It therefore appears that-the proceeds of the sale of the first mortgage bonds of the Connecticut Western Railroad Company andi of the shares of the New York & New England Railroad Company were to form the fund from which these expenses were to be paid, and that after these expenses were paid the surplus was to be divided among the holders of the trust certificates issued therefor. Now, the plaintiffs in this action have nowhere shown what part of these expenses were properly chargeable against the 235 shares of the New York & New England stock. It certainly is not the purport of that decree that the bonds of the Connecticut Western Railroad Company shall bear all of such expenses. But the costs and expenses were to be deducted out of the proceeds. of both
There seems to be some question whether the action can be maintained at all, and whether application should not have been made at the foot of the decree entered in the action in pursuance of which the securities were sold. But this question it is not necessary now to determine. The interlocutory judgment should be Reversed, with costs, and the demurrer sustained, with leave to amend upon payment of the costs of the appeal and in the court below. All concur.