Court Opinion

ID: 9643918
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:43:32.535566+00
Date Added: 2024-06-11T18:11:05.577183
License: Public Domain

HAND, Circuit Judge
(dissenting).
It seems to me to make no difference whether the mortgagor makes a deposit on which he draws checks in favor of the bondholders when coupons are presented at his office, or whether he directs the bank to issue cashier’s checks where the coupons are presented to itself. In the first ease, each check is a separate order on the depositary to pay the payee, who has previously presented the coupon to the mortgagor;, in the second, the letter remitting the funds is a single order to pay to any one who presents a coupon. I can see no distinction between the two, except that in the one case the whole thing is done at once, while in the other it is done piecemeal. Moreover, In re Interborough Consolidated Corporation, 288 F. 344, 32 A. L. R. 932, professed to follow and to depend upon Staten Island Cricket & Baseball Club v. Farmers’ Loan & Trust Co., 41 App. Div. 321, 58 N. Y. S. 460, and Noyes, Receiver, v. First National Bank, 180 App. Div. 162, 167 N. Y. S. 288, affirmed 224 N. Y. 542, 120 N. E. 872, and in these the funds were remitted at onee, with direction to pay, and the depositary paid at its own office on presentation by the coupon holders. It does not advance matters to say that in the second case the mortgagor has parted with control.over the funds, for that is just the question that we are to decide. In the case at bar, the mortgagor may be said to have parted with control if one likes, but so he may, though he reserves the right to draw cheeks in favor of coupon holders. It is equally logical to say that that is his only reserved power. In either case it is merely a question of how you interpret a transaction which was not fully expressed.
Nothing in the correspondence at the time should affect the result. The funds are described as “covering six months’ interest on the 7 per cent, first mortgage gold bonds of this company as per trust agreement dated June first, 1922.” This merely served to identify them, and in no sense determined the capacity in which the depositary received them. Nor do I attach any significance to the form of the voucher, “cash voucher in favor of Central Union Trust Company of New York, Trustee.” The parties do not mean such phrases to color their legal relations. Whatever may be said for the original ground of the doctrine and for any theoretical distinction between dividends and coupons, it seems to be unfortunate to introduce nice distinctions into such a subject, where certainty and simplicity is the first requirement.
The appellant relies upon the language of article 12 of the mortgage. While I agree that literally construed it might cover the deposit of funds with the trustee as depositary, it seems to me very clear that the parties had no such situation in mind. They were thinking about article 4, which provided for redemption. So far as concerned the provisions of the mortgage, the mortgagor was to pay the coupons when presented at its own office or at the office of some agent to be appointed. That agent might be the trustee or any one else, but the mortgagor had no ■thought of losing more control of the deposit, because he chanced to be the trustee, than if he were some one else.
While I am inclined to think that the result reached by my brothers is the right one, it seems to me at the expense of simplicity and certainty and in substance to be contrary to our decision in Re Interborough Cons. Corporation, supra.