New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-07-31
A WEST SHORE DECISION.
TRUSTEE GREEN'S DEMURRER ovERRULED
JUDGE RRowN's DECISION IN THE FORECLOSURE


JUDGE BROWNS DECISION IN THE FORECLOSURE
SUIT.
NEwBURG, n. Y, July 30.-A few days ago
the hour set for the trial. before Judge Charles f.
Brown Supreme Court lid District, Of tho action of
foreclosure OF the $50 100000 mortgage Of the West
Shore Roroad Company, when Joseph H. Choate. OF
NewYork appeared for the North River Construction
Company and for Judge Ashbel Green as trustee and
receiver, defendant and ntcrposed demurrer and de-
manded postpouement Of the argument thereon as well
the trial Of the action for foreclosure The Court set
down the trial OF the foreclosure action for the second
Monday in September In this city, and afterward heard
argument the demurrer. on which decision was re
served. The title Of the action is the United states
Trust Company vs. The New-York, West Shore and
Buffalo Railroad Company, Ashbel Green, as trustee
and Others IN the decision the Court says the de-
PENDANT Green has demurred to the complaint and
amended complaint In this action upon the ground that
they do state Of action against any OF the
defendants, and the point is made thar under its ex
press terms conditions the trustee has authority
institute judicial proceedings to forccose the mort
gage until he has requested In writing to do by
onc-third In interest of tho holders Of the
bonds thereby secured and outstanding at
the time of the commencement OF tho suit
81 do think" says Judge Brown, THAT this claim
is we'll founded the of the commencement Of
the action the trustee had the right to foreclose
for unpaid interest, the demurrer must be
overruled; whether he has such right Is
not DO determined from single clause
or expression In the mortgage, but from an examna-
OF the whole and asccrtanng the int
ton OF tho parties Tho mortgage contains fourteen
separate conditions Each Is unit itsof and Is d.
rected to a similar end. None OF them refer TO the
Others and each one contains separate ana complete
agreement. These conditions are stated in the mort
gage be the parties to tho nsru
ment and between the railway company and the re-
spectve persons corporations firms and partnerships
Win all
the trustee shall hold tho mortgage property are as
stated in the said several conditions IL Is worthy OF
observation that none powers conferred by these
several conditions such arise from the character
OF the instrument and which the trustee would take by
Implication of law each is power which be
conferred on and which the could exercise, only
from s delegation by the express terms OF the mort
gage. The first four conditions require notice what
ever The fifth provides that in default should be
made In the payment OF tho interest and such default
shall continue for six months after payment shall be
demanded that then the entire principal sum shall at
the option OF the trustee become due aud payable
requested to do by onethrd in interest OF the bond
holders IL Is then made obligatory upon tho trustee to
declare the said principal sum duo as aforesaid
The sixth provides that In default
Is made in the payment Of any money principal or IN
terest thereby secured and such default continue FOR
after demand OF payment. that the railway
company shall forthwith surrender to the trustee the
actu, possession OF the m0rtga.ed property, and in
such ease declared to be lawful for the said trustee
10 upon and take possession OF the said
railway and operate the The seventh provides
for sale OF the gagged property at public auction In
tho CITY OF and declares that after default
aforesaid 1t shall be lawful for the said trustee. with or
without entry sell the morgagcd property therein
provided The remaining conditions contain nothing
that Is applicable TO the question under discussion.
Leaving out sideraton for the present the eighth
condition. 1t Is apparent from the other parts OF the
mortgage which have quoted that It the intention
OF the parties the Instruments in case the railway CON-
many made default In the payment any OF the moneys
secured to paid confer upon the trustee large
discretion as the enforcement OF the mortgage. Iii
equally clear that IL WAS intended protect the bond
holders against dlaory or negligent trustee and tho
apt and clear expressions confer
ring on each these parties power to act in the
era eases provided for In OF default In the pay
mcnt Of Interest. II such default continue for six
months the principal may be declared due by the
tru stee There upon him any in the
mortgage declare the principal due, except by |
majority Of tho Dondhodsrs, which provision is here
after referred TO- The language shall become due
and payable mmcd tey at the option OF trustee,
ANYTHING In the bonds herein TO the contrary not
with standing. but Immediately following. In the same
the trustee In his option does not declare the
principal due. aud II Il provided that In case onethird
Of the bondho ders by Instrument IN writing
do. that II shall then be his duty
and 1t II made obligatory upon MIN 10 declare the prlnci-
Dfl~
Of the mortgage majority In interest OF the bond.
holders control the trustee IN declaring or RETAINING
conditions as such majority shall deem proper and
errng upon such majority the power TO annu or reverse
the declaration. II already made anything Ia the mort
gage to the contrary not outstanding .,.
gage because here that the penalty is declared
failure 10 pay the interest upon the debt, and the
provisions here made control all subsequent action IN
TO the enforcement OF the rights OF the bond
holders and here find In clear and expressive Ian
gusgs that the nitiatory steps all subsequent pro-
lfnps
bonds viz, the right to eloct that such prin-
In payment of interest, placed; u With the trustee.
10 be exercised at his discretion % with onethlrd IN
Of tho bondhodrrs Is placed the power to veto to
regulate OF the trustee and those OF the aore
provisions After default continuing for six months 1t
Is declared lawful for said trustee TO enter upon
operate the railway To the same effect is the seventh
condition After default made as aforesaid It 10 declared
be lawful for tho trustee with or without entry to
sell all the gagged property at public auction In the
city OF New.Yor. These two condition: contain no
limitation upon the powers therein given to the trustee
make reference to any other clause or condition
the i1S therein Conferred and Unless restrained by
eighth condition they are limited except only so Tar
as they may be controlled or regulated by the majority
of the bondhoders IA provided for IN the th condition
apparent that by these several conditions pros
and for enforcing their rights against the mortgaged
property in every way possible except oy judicial pro-
conferred In express except IN the eighth
Its omission. however from the MORTGAGE ofno
because ssa power wncn dhe b
nature character OF the security and arises by imp
upon the face OF the mortgage and IN the absence
OF any restraining the trustee his failure to
do So an bondhodsr default in the payment OF any
bonds held by HIM. can die bill for fore
closure OF the Mortgage and for sale OF the mortgaged
property and in the trustee should elect upon de-
fault OF payment OF interest TO declare the principal sum
due declaration would be for tho beneht Of ALL
any bondhoder might briu. action " forecose tho
mortgage and to collect the principal OF his bond In
the eighth clause, therefore we must have
egard all the powers tha by the preceding clauses
the MORTGAGE had been conferred the trustee
upon the bondhOdes whether they Do given by express
terms arise by implication upon the face OF the instru
men and, have already shown, the trustee had, by