New York Railways Co. v. Guaranty Trust Co.

Headnote

N. Y. Railways Co. v. Guaranty Trust Co., 163 App. Div. 396 ,. affirmed.

Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered September 24,1915, in favor of defendants upon the submission of a controversy under section 1279 of the Code of Civil Procedure. The object of the litigation was to obtain a construction of certain provisions of the first real estate and refunding mortgage of the New York Railways Company, dated January 1, 1912, of which the Guaranty Trust Company is trustee. The only question involved, in the submission was whether certain funds in the hands of the defendant Guaranty Trust Company of New

York, as trustee under the so-called refunding mortgage of the New York Railways Company, could be used to pay for the acquisition of $600,000 of the thirty-year five per cent first mortgage bonds of the Metropolitan Crosstown Railway Company. The defendant the Farmers’ Loan and Trust Company, as trustee under plaintiff’s adjustment mortgage, “ Exhibit B,” had a second lien on these funds. The Appellate Division held that the moneys could not be thus used.