Case ID: nys_10/html/0810-01.html
Source: Caselaw Access Project
Author: {"author": "Barnard, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Farmers’ L. & T. Co. v. New Rochelle & P. R. Co.
    
      (Supreme Court, General Term, Second Department.
    
    July 18, 1890.)
    Parties—Necessary Parties.
    A resolution granting permission to a railroad company to lay its tracks in the streets oí a village required the company to give its bond conditioned to indemnify the village from all damages sustained from the building of the road. The bond was given, and the village brought suit thereon, claiming that the condition had been broken. Held, that this did not render the village a necessary or proper party to an action to foreclose a mortgage given by the company to secure a series of its bonds.
    Appeal from special term, Westchester county.
    Action by the Farmers’ Loan & Trust Company against the New Rochelle & Pelham Railroad Company, to foreclose a mortgage given by defendant to secure a series of its bonds. The village of New Rochelle moved to be made a party defendant, and now appeals from an order denying the motion.
    Argued before Barnard, P. J., and Dykman and Pratt, JJ.
    
      Martin J. Keogh, for appellant. Turner, McClure & Rolston, for respondent.
   Barnard, P. J.

The defendant is a domestic corporation formed to construct a street railroad in Hew Rochelle, with a branch to Pelham; On the 2d day of Hovember, 1885, the board of trustees of the village of Hew Rochelle granted by resolution permission for the defendant to construct, maintain, and operate its road on the streets and highways of the village, as expressed in the resolution. Certain conditions were contained in the resolution in respect to the method to be observed in building and keeping in repair the railroad, and in grading the streets between the tracks, and on each side of the same. In 1888 the defendant executed a mortgage to the plaintiff on its road, and franchises, privileges, and equipments to secure a loan. This action is brought to foreclose that mortgage. Among the conditions specified in the resolution giving the privilege to lay the tracks in the village was one to the effect that the railroad company should indemnify the village from all damages which might result from the building the road, or the grading the streets, and that a bond in the penal sum of $10,000, should be given to that effect. The bond was given, and the village claims that damages were sustained by the village by reason of the acts and omissions of the railroad, and has commenced an action upon the bond to recover the amount thereof. This action was commenced in October, 1889, and is still pending. The railroad denies all liability in its answer. In November, 1889, the Farmers’ Loan & Trust-Company commenced an action to foreclose its mortgage, and the village applied to be made a party defendant. The motion was properly denied. There is nothing in the resolution which gives or purports to give a lien on the railroad. Conditions are imposed as to construction and grading, and a bond demanded to secure the observance of these conditions, but no lien is called for. The franchise to the defendant was not given by the village, but by the people upon the consent of the village. This consent is irrevocable as against the loan company, and railroad after its construction, and the purchaser will take subject to the conditions contained in the consent. The village is therefore only a general creditor as against the railroad, and under the case of Herring v. Railroad Co., 105 N. Y. 340, 12 N. E. Rep. 763, cannot be made a party defendant. If the village has the first lien on the railroad it will remain after the Farmers’ Loan & Trust Company foreclose their subsequent one. As a first lienor the village would not be a proper party. Goebel v. Iffla, 111 N. Y. 170, 18 N. E. Rep. 649. The order should be affirmed, with costs and disbursements. All concur.