Case Name: The Farmers' Loan & Trust Co., Resp't, v. The New Rochelle & Pelham R. R. Co., Def't
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-07-18
Citations: 32 N.Y. St. Rep. 714
Docket Number: 
Parties: The Farmers’ Loan & Trust Co., Resp’t, v. The New Rochelle & Pelham R. R. Co., Def’t.
Judges: 
Reporter: New York State Reporter
Volume: 32
Pages: 714–715

Head Matter:
The Farmers’ Loan & Trust Co., Resp’t, v. The New Rochelle & Pelham R. R. Co., Def’t.
(Supreme Court, General Term, Second Department
Filed July 18, 1890.)
Foreclosure — Railroad mortgage — Parties.
The village of Hew Rochelle gave its consent to the construction and operation of defendant’s road on its streets and highways on condition that it should indemnify the village from all damages which might result therefrom and give a bond for that purpose, and has since commenced action-on the bond. »Held, that the village had no lien on the property of the railroad but was only a general creditor and could not be made a party under § 452 of the Code, to an action to foreclose a mortgage given by the railroad company.
Appeal by the village of New Rochelle from an order denying its motion to be made a party defendant.
Action brought by plaintiff as trustee to foreclose a mortgage made by defendant to secure a series of bonds.
Martin J. Keogh, for app’lt; Herbert B. Turner, for resp’t.

Opinion:
Barnard, P. J.
The defendant is a domestic corporation formed to construct a street railroad in New Rochelle, with a branch to Pelham.
On the 2d day of November, 1885, the board of trustees of the village of New 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 track 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 omission 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 Co., commenced an action to foreclose its mortgage, and the village apply 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 of the village 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. N. Y., L. E. & W. R. R., 105 N.Y., 340; 7 N. Y. State Rep., 547, 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; 19 N. Y. State Rep., 105.
The order should be affirmed, with costs and disbursements.
Pratt, J., concurs.