Daly v. N.Y. & G. L. Ry. Co.
| Decision Date | 21 August 1897 |
| Citation | 65 N.J.E. 595,38 A. 202 |
| Parties | DALY v. NEW YORK & G. L. RY. CO. et al. |
| Court | New Jersey Court of Chancery |
Foreclosure suit by Eugene P. Daly against the New York & Greenwood Lake Railway Company and others. Heard on pleadings and proofs. Decree for complainant.
The object of the bill is to foreclose a mortgage on land, given by Henry C. Spaulding to John Sands Howell, dated June 17, 1872, to secure the sum of $4,650 in four years, and further secured by the bond of the mortgagor. The complainant claims to be the assignee of this bond and mortgage. They were given as part of the consideration money of the conveyance by Howell, the mortgagee, and others, to Spaulding, of the tract covered by the mortgage, containing 10.25 acres of land, situate at Secaucus, in Hudson county. By deed of the same date (June 17, 1872), Spaulding conveyed 904 of an acre, part of the premises, to the Montclair Railway Company. This was a narrow strip, upon which it was proposed to build, and upon which a section of the railway of that company was afterwards built. The deed to Spaulding was acknowledged by a part of the grantors on the 17th of June, by another part on the 19th, and by another part on the 21st of June, 1872. The mortgage was acknowledged by Spaulding on the 28th of June, and the deed for the strip to the railway was acknowledged on the same day. The two deeds were recorded on the 2d of July, 1872. The mortgage from Spaulding to Howell, sought to be foreclosed, was not recorded until the 10th of July,—eight days after the record of the deed from Spaulding to the railway company. Spaulding was one of the directors of the railway company, was its superintendent and purchasing agent, and in the purchase acted entirely as the agent and trustee of the railway company. He held the title to the nine acres and a fraction of the whole tract not conveyed to the railway company in trust for it. The whole transaction was carried through with the full knowledge and consent, previously obtained, of all the officers of the railway company, so that the railway company had full and complete notice of the mortgage to Howell for part of the consideration money. At the time of this transaction the railway was under a first mortgage to Marcus L. Ward and Abram S. Hewitt, as trustee for certain bondholders. That mortgage was dated the 1st of September, 1870, and recorded on the 2d of September, 1870, in the book of deeds for Hudson county. The description of the premises covered by it is as follows: "All and singular, the line of railway known and to be known as the 'Montclair Railway,' as the same is being and shall be constructed from the line of the state of New York, at or near Greenwood Lake, to the Hudson river, also the branches thereof, * * * including all the railways, ways, rights of way, and depot grounds, or other lands, all tracks, bridges, viaducts, culverts, fences, and other structures," etc, "* * * and all real and personal property held or acquired, or hereafter to be held or acquired, by the said company, its successors or assigns, for use in connection with the aforesaid railway and branches of the party of the first part, or with any part thereof, or with the business of the same, * * * and also all franchises connected with or relating to the aforesaid railway and branches, or to the construction, maintenance, or use of the same." A second mortgage was given by the railway company to Mr. Hewitt alone, as trustee, using the same description of the premises as above set out, on the 1st of November, 1871, and recorded on the 15th of January, 1872, to secure another issue of bonds. The second mortgage was duly foreclosed, and the property purchased by and conveyed to Mr. Hewitt, as trustee, by master's deed dated January 7, 1875. The first mortgage was duly foreclosed and conveyed by master's deed to Marcus L. Ward and Abram S. Hewitt, trustees, September 27, 1875. Ward and Hewitt conveyed, by deed dated November 29, 1875, to the Montclair & Greenwood Lake Railway Company, a new organization; and this second railway company mortgaged to George Walker and Amzi Dodd, trustees, by deed of trust dated December 1, 1875, all its lands and property of every kind. This mortgage was foreclosed, and the property purchased by and conveyed to Abram S. Hewitt, Cyrus W. Field, and John B. Dumont by master's deed dated October 5, 1878, and Hewitt, Field, and Dumont conveyed by deed dated November 5, 1878, to the New York & Greenwood Lake Railway Company, the defendant herein. Neither Howell nor his personal representatives were made parties to either of these foreclosure proceedings. Receivers were also appointed of this railway company after the conveyance of Spaulding to it, and before the first foreclosure, and they also conveyed to Hewitt as trustee, but their conveyance did not cover any land in Hudson county; and counsel for the railway company relied entirely upon the mortgages of 1870 and 1871. The principal question is whether the foreclosure of the mortgages of 1870 and 1871 had the effect of divesting the lien of the complainant's mortgage upon the strip of .904 acre constituting a part of the railroad bed. Another question was raised as to the standing of the complainant Daly, in this court. Howell, the mortgagee, died not long after the giving of this mortgage, leaving a will, which was offered and admitted to probate in the city of New York on the 28th of January, 1873. Letters testamentary were issued by the surrogate of New York City to Henry K. Van Siclen and William Joyce, executors named therein, both of the state of New York. Subsequently, in 1879, proceedings were had to remove both these executors, with the result that both executors were removed by decree of the surrogate dated October 13, 1879, and their letters testamentary were superseded. Subsequently an order was made in the supreme court of the city and state of New York on the 17th of October, 1879, appointing Edward C. Sheehy trustee under the will of Howell, in the place and stead of Van Siclen and Joyce; and it was ordered that, upon service of a copy of the order upon Van Siclen and Joyce, they should pay over, assign, transfer, and deliver to Sheehy all the money, securities, assets, and property of every kind and description in their hands or possession belonging to the estate of Howell. Under that order, demand was made by Sheehy upon Van Siclen and Joyce for the assets of the Howell estate, and, as a part of these assets, Van Siclen and Joyce handed to Sheehy the bond and mortgage here in question, but did not execute any formal assignment of it. Sheehy then duly assigned the mortgage to the complainant, Daly.
Joseph Anderson, for complainant.
Cortlandt Parker, Jr., for defendant New York & G. L. Ry. Co.
PITNEY, V. C. (after stating the facts). The first question is as to whether the complainant has standing in equity as the owner of this bond and...
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