Court Opinion

ID: 8775968
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:01:32.000322+00
Date Added: 2024-06-11T17:02:33.334125
License: Public Domain

HAND, District Judge.
I concur in the disposition of the points raised, except that I regard as income a part of the interest to February 1, 1908, payable upon the notes for construction advances. That part is the proportion of such interest which will be borne by the shares of stock not pledged under the mortgage: I would direct the transfer of the note and open account to the trustee with directions to collect in hotchpot any dividends in distribution upon the total indebtedness of the Forty-Second Street Railway. I would further direct the trustee so to marshal the dividends received as first to retain, subject to the lien of the mortgage, enough to pay in full the principal of all construction notes of the Forty-Second Street Railway Company and thereafter to pay over to the appellant such proportion of the remainder — which would represent interest on these construction notes — as the number of shares in the Forty-Second Street Railway, not pledged under the mortgage, bears to the total stock issue outstanding. This proportion of the interest representing in my judgment true income of the mortgagor, as it must have been understood in the mortgage, the covenants, though verbally applicable, do not cover it, and it goes to the mortgagor even though uncollected. New York Security & Trust Co. v. Saratoga Gas & Electric Co., 159 N. Y. 137, 53 N. E. 758, 45 L. R. A. 132. In view of the fact that these views do not prevail with my brethren, I shall forbear giving my reasons at length.