McGrath v. Carnegie Trust Co. — 167 A.D. 32

Majority

p. 32

John M. McGrath, Respondent, v. Carnegie Trust Company and George C. Van Tuyl, Jr., as Superintendent of Banks of the State of New York, Appellants, Impleaded with Nineteenth Ward Bank and Others, Defendants.

First Department,

March 26, 1915.

Headnote

See head-note in Madison Trust Co. v. Carnegie Trust Co. (ante, p. 4).

Appeal by the defendants, Carnegie Trust Company and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 12th day of March, 1911, upon the decision of the court after a trial at the New York Special Term.

The judgment decreed that the instrument sued upon be reformed, and that plaintiff have judgment upon it as so reformed.

Joseph A. Kellogg, for the appellants.

Tompkins McIlvaine, for the respondent.

Some time after the Carnegie Trust Company .failed, the Nineteenth Ward Bank became financially involved and borrowed a large amount of money from one Phipps, and as collateral security gave to him the notes it had received from Moore and the Merchants and Manufacturers Securities Company, aggregating $110,000, and which notes are more particularly referred to in the opinion in the case of the Madison Trust Company against these same appellants. Subsequently Phipps transferred' the notes to the plaintiff. Although both of the foregoing transfers are attacked on this appeal and, as well, the right of both Phipps and the plaintiff to succeed to the equities of the bank arising out of the trust letter signed by Smith, vice-president of the Carnegie Company, I am satisfied that this attack is justified neither in fact nor in law, and that the plaintiff has succeeded to all the rights of the bank with respect to the trust, which for the reasons given in my opinion in the case of the Madison Trust Company I hold to

Dissent

p. 33

have been established by the letter. All other questions involved herein have been disposed of in Madison Trust Co. v. Carnegie Trust Co. ( 167 App. Div. 4 ).

The judgment should accordingly he modified so as to allow plaintiff to recover the amount of his debt as a simple creditor, and so modified affirmed, without costs.

Laughlin and Dowling, JJ., concurred; Ingraham, P. J., and Scott, J., dissented and voted for reversal.

For the reasons stated at length in Madison Trust Co. v. Carnegie Trust Co. ( 167 App. Div. 4 , 23), decided herewith, I am of opinion that the judgment appealed from should be reversed and the complaint dismissed, with costs to appellants in all courts.

Ingraham, P. J., concurred.

Judgment modified as directed in opinion, and as modified affirmed, without costs. Order to be settled on notice.