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and 118 New York State Reporter that they might thus have a lien upon the entire property, and, under the judgment of sale in this action, give to a purchaser a good title thereto.

An action such as this, which is intended to establish an equitable lien which shall be more extensive than the mortgage which the plaintiffs hold, and then to foreclose such lien when established, is, in our opinion, something unlike and dissimilar to an ordinary foreclosure suit. Were it sought to create a mortgage on the property, then, seemingly, in such an action, all persons having an interest in the property should be made parties. With respect to those having an interest therein, what is the difference, in principle or in result, between an attempt to create a mortgage on the property, and reestablishing a mortgage thereon which has been once legally satisfied ? By the amendment made in 1897 to section 87 of the real property law (Laws 1897, p. 50, c. 136), it was provided that a trustee could not be authorized by the court to make a mortgage binding his estate and future estates until notice of the application has been served upon “the beneficiary of such trust, and every other person in being having an estate, vested or contingent, in reversion or remainder, in said real property.” In an action such as this, wherein it is sought to establish an equitable mortgage or lien, seemingly the same practice should be followed, with a view to effectually cutting off contingent interests in the property.

Here the infant son of Mrs. Jeffries, it is claimed, has a contingent estate in the premises; and it is agreed, we take it, that as such he would have been a proper party. The plaintiffs insist, however, that he is not a necessary party. It is not essential for us to determine flatly that he is, which is the view we would be inclined to take if a decision were required; but, to render this title unmarketable, it is only necessary that upon that question there exist a reasonable doubt, which should not be solved in the absence of those to be affected thereby.

To obviate the objection made, certain of the respondents suggest that, under the will as it should be construed, the alleged contingent remaindermen had no interest in the property. It is urged that the purchaser should be compelled to take on the ground that, under the will of their father, Joseph Rosenfield, the children then alive took a vested estate absolutely upon the remarriage of their mother, and that therefore there was no contingent remainder, in favor of their issue or any one else, outstanding. We would gladly assent to this view, as a means of curing the objection, if such a construction were entirely free from doubt; but where, as here, there is a serious dispute as to the construction of the will, we can only repeat what has already been said in our discussion of another point-that before reaching a determination which would exclude the son of Mrs. Jeffries, who, it is insisted, has a contingent estate in the property, he ought upon that question to have his day in court.

The other contention, that this purchaser acted at the sale with knowledge of the fact that this contingent remainderman was not a party, and is therefore estopped, is, we think, equally without merit, The bank, wanting the property, was not required, even with the knowledge of the question involved, to permit some one else to purchase it at a lower price, perhaps eventually to find that the title would be upheld as marketable and good. This would be asking the bank to run the risk of losing the property. It had the right to purchase at the sale, even though it knew of, and intended to raise, the question affecting the title, and thus submit, as in this case was done, to the court its rights as a purchaser.

Having reached the conclusion that this is not a simple foreclosure suit, and that there is no disposition to extend the rule as to necessary parties in actions affecting real estate, it is sufficient for the determination of the present appeal to say that upon the question whether the contingent remaindermen were or were not necessary parties, which we are not called upon to decide, there is such a grave doubt that the Special Term should not have compelled the purchaser to complete the sale and accept a title which, in the face of this objection, was, we think, unmarketable.

The order accordingly should be reversed, with $10 costs and disbursements, and the motion to compel the purchaser to take the property should be denied, with $10 costs.

HATCH and LAUGHLIN, JJ., concur. PATTERSON, J., dissents. VAN BRUNT, P. J., concurs in result.

HAYES V. KLOCK. (Supreme Court, Appellate Division, First Department. November 6, 1903.) 1. TRUSTS-ACTION TO ENFORCE--EVIDENCE.

Plaintiff, an individual judgment creditor of a president of a corporation, intimated that he intended taking steps to reach the debtor's interest in the corporation, whereupon, in pursuance of an agreement with the debtor's attorney, an instrument was drawn up, by its terms including plaintiff, the corporation, and the stockholders of the corporation, by which the corporation was to assign to the debtor's attorney a lease owned by it, which he was to sell, and hold the proceeds in trust for the parties to the agreement, and to pay, in full or pro rata, their claims. The agreement was signed by said attorney and by the debtor individually and for the corporation, but not by the stockholders or by plaintiff. Held that, on the attorneys receiving the proceeds from a sale of the lease, an action against him on the ground that he held trust funds which should be paid to plaintiff could not be maintained, as the trust was not

constituted. Appeal from Special Term.

Action by James E. Hayes against Percy L. Klock. From a judgment dismissing the complaint, plaintiff appeals. Affirmed.

Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, INGRAHAM, and LAUGHLIN, JJ.

Jerome Eisner, for appellant.
Ira G. Darrin, for respondent.

PATTERSON, J. The complaint in this action was dismissed on the merits. The plaintiff sought to recover an amount of money

and 118 New York State Reporter in the hands of the defendant, alleged in the complaint to be held in trust by the defendant under an agreement that he would pay it over to the plaintiff. It is alleged in the complaint that certain persons therein named, including the plaintiff, were creditors of one Nelville F. Frame and of the Standard Importation Company, a domestic corporation; that Frame and one L. V. Schlosser were the principal stockholders of the Standard Importation Company; that the corporation was the owner of a lease of premises known as No. 36 Broadway, in the borough of Manhattan, in the city of New York, which lease had a surrender value of $2,000; that, for the purpose of inducing the plaintiff and various other creditors to refrain from prosecuting their claims against the Standard Importation Company, that company, in the month of March, 1902, transferred to the defendant the lease of the premises aforesaid, and assigned to him any moneys he might obtain for the surrender of the lease, 'upon the trust that the defendant should hold the lease, or the proceeds thereof, until the 25th of April, 1902, at which time he was empowered (and he agreed) to pay out of the amount realized from the surrender of the lease, to each of the creditors, certain amounts; and, in case the amount realized on the sale of the lease should be less than the sum total of the indebtedness of the creditors, the defendant agreed to pay the claims pro rata. It is also alleged that the deiendant, as trustee, surrendered the lease to the owners of the premises, and received therefor, in performance of the terms and conditions of his trust, the sum of $6,500; that the plaintiff has demanded from the defendant the amount of his claim, but defendant has refused to pay the same. The answer is in the form of a general denial, except that the defendant admits that he has not paid the plaintiff's claim.

Upon the trial of the action, it appeared that an instrument in writing was signed by the defendant, by Frame, and by the Standard Importation Company, by Frame, its president. At the same time Frame, president of the Standard Importation Company, signed what purported to be an assignment of the lease to the defendant, Klock; but the instrument purporting to be a trust agreement was not signed by any of the parties recited therein as parties thereto, other than those mentioned. It also appeared in evidence that Klock had stated to the plaintiff's attorney that he had received the consideration for the surrender of the lease, that he had the proceeds in bank, and that he held them under the trust mentioned in the instrument.

Judgment against the defendant, Klock, is sought'only on the ground that he has trust funds in his possession which should be paid over to the plaintiff; and the plaintiff's right to the money according to the proof, is specifically based upon the terms of a proposed written agreement. That agreement, when originally drawn, was inspected by the attorney for the plaintiff, and the plaintiff's right to be paid out of the trust fund grows entirely out of what was contemplated by the terms of that agreement. The trust set up was not one for the payment of an indebtedness of the Standard Importation Company. It owed the plaintiff nothing. The plaintiff had recover d a judgment against Mr. Frame individually, who happened to be the

president of the corporation, and a stockholder therein. It was intended by the plaintiff to institute supplementary proceedings against Frame, and third-party proceedings had actually been begun against the corporation. The defendant, Klock, was the attorney for Frame. The plaintiff's attorney represented to Klock that he was going to take steps to reach the interest that Mr. Frame had in the corporation. Klock then said that he was unwilling that that should be done,

for the reason that the corporation had a valuable lease which it in.tended to sell to the landlord, as it was understood that the building was to be torn down and a new one was to be erected, and that the lease had a surrender value. Thereupon the plaintiff's attorney told the defendant that he was willing to be trustee, and could get the corporation and all the people interested “to consent to execute a declaration of trust”; that is, Klock to execute the declaration of trust, and they to assign the lease, so that the proceeds should be in Klock's hands; then the plaintiff's attorney would consent to Klock being a trustee. Subsequently Klock showed to the plaintiff's attorney an executed assignment of the lease. The plaintiff's attorney also testified that he was told by the defendant that he had the money, and that he held it pursuant to the terms of the trust agreement. He also testified that he saw the original draft of that trust instrument, and that the instrument in its present shape, as offered in evidence, was the result of conferences between him and the defendant.

It is apparent from the testimony of the plaintiff's attorney that it was contemplated between the parties that this individual debt of Mr. Frame should be paid out of the property of the corporation upon the consent only of all persons interested in the corporation, to be evidenced by the execution of an instrument authorizing the payment to be made. That instrument was prepared, and was between creditors of the corporation, including the plaintiff, the corporation itself, and all the stockholders of the corporation; it being shown that the persons named in the agreement as stockholders were the only stockholders. The funds of the company were not to be appropriated to the payment of a debt of a third party without the full consent of the stockholders, as well as of the corporation, and that consent was to be testified to by the execution of a written agreement. That agreement never was executed by the stockholders. It was an incomplete instrument. It was only signed by Frame, by Lee, by the Standard Importation Company, by Frame, as president, and by Klock. The trust never was constituted. The stockholders never consented to the appropriation of their money to the payment of an individual debt of one of the company's officers.

This action is brought specifically to compel Klock to account for the proceeds of the sale of the lease, and to pay the plaintiff's claim in pursuance of the terms of a trust; and, as no trust was constituted, the funds of the corporation cannot be diverted to the payment of Frame's debt to the plaintiff. Whatever other rights plaintiff may have as against Klock, it is not necessary now to consider.

The judgment should be affirmed, with costs. All concur.

and 118 New York State Reporter

(87 App. Div. 320.)

MULLIGAN V. THIRD AVENUE R. CO. (Supreme Court, Appellate Division, First Department. November 6, 1903.) 1. STREET RAILROADS-INJURIES TO PEDESTRIANS–NEGLIGENCE-QUESTION FOR

JURY.

In an action for injuries to plaintiff by a street car as she was crossing the track at a regular street crossing, held, that the question of the motorman's negligence was for the jury.

Van Brunt, P. J., and Ingrabam, J., dissenting.

Appeal from Trial Term, New York County.

Action by Mary Mulligan against the Third Avenue Railroad Company. From a judgment in favor of plaintiff, and from an order denying defendant's motion for a new trial on the minutes, and from an order granting an additional allowance, defendant appeals. Affirmed.

Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, INGRAHAM, and LAUGHLIN, JJ.

Arthur Ofner, for appellant.
Franklin Pierce, for respondent.

LAUGHLIN, J. The action is brought to recover damages for personal injuries alleged to have been sustained by the plaintiff through the negligence of the defendant. The principal contention on the part of the defendant is that there is no evidence of the defendant's negligence, and that the plaintiff was guilty of contributory negligence. This is the third verdict rendered in favor of the plaintiff in this action. The case has been twice before this court. Mulligan v. Third Ave. R. R. Co., 39 App. Div. 663, 57 N. Y. Supp. 424; Id., 61 App. Div. 214, 70 N. Y. Supp. 530. On the first appeal the judgment in favor of the plaintiff was reversed, this court expressing the opinion that there was not sufficient evidence of negligence on the part of the defendant to take the case to the jury, but held that, assuming that the plaintiff established a prima facie case, the court erred in instructing the jury on a proposition of law. On the second appeal the judgment in favor of the plaintiff was reversed, and a new trial granted, four members of the court concurring in the proposition that an error was committed in the reception of evidence, and the majority expressing the opinion that there was no negligence shown on the part of the defendant, but two dissenting from that view, and expressing the opinion that the evidence required the submission of the case to the jury.

It is claimed in the points for appellant that the evidence is the same as that upon the former appeal, but the reverse of this is claimed by counsel for respondent. The learned trial justice states in a memorandum denying the motion for a new trial that "the case presented by the plaintiff is here appreciably stronger than on the former appeal.” The evidence in favor of the plaintiff, as presented by this

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