Cumming v. Middletown, Unionville & Water Gap Railroad

The plaintiff is one of two trustees under a mortgage executed and delivered by the defendant, the Middletown, Unionville & Water Gap Railroad Company, as security for a series of bonds amounting in all to the sum of $250,000. The bonds and the trust mortgage became finally due on December 1, 1910, and no part of the moneys secured by the said mortgage and bonds has been paid. This action has been brought by the plaintiff alone, in his own name as trustee, to foreclose the mortgage. The cotrustee, one John G. McCullough, is not a party plaintiff, but has been made a party defendant. The mortgagor defendant has demurred to the complaint, on the ground that there is a defect of parties plaintiff, in that the co-trustee, McCullough, has not been joined as a plaintiff. A motion was made by the plaintiff for judgment on the pleadings, on the ground that the demurrer was insufficient. This motion was granted, but with leave to the demurring defendant to withdraw the demurrer and to answer the complaint. From an order entered accordingly, the defendant mortgagor now appeals.

The question of law involved arises under section 448 of the Code of Civil Procedure, which provides in part as follows:

“Of the parties to the action, those who are united, in interest must he joined as plaintiffs or defendants, except as otherwise expressly prescribed in this act. But if the consent of any one, who ought to be joined as a plaintiff, cannot be obtained, he may be made a defendant, the reason, therefor being stated in the complaint.”

- The plaintiff herein alleges in his complaint that the reason why the cotrustee, _ McCullough, was made a party defendant is that said trustee is a director of the defendant mortgagor company, and that thereby he is not qualified to represent the bondholders in an action to enforce their obligations against his company. There is no allegation that McCullough was requested to be a party plaintiff and that he refused his consent.

[1] It is the ordinary rule of law that trustees cannot act separately and that all must unite, as they constitute in law but one person and must join in bringing the action. Thatcher v. Candee, * 42 N. Y. 157 , 159. This rule is subject to exceptions. Where a cotrustee has taken a position hostile to his trust, it is not necessary that he should join in an action to enforce the trust; and because of such hostility he may be made a party defendant, even without having been requested to join in the action as a party plaintiff. Wallach v. Dryfoos, 140 App. Div. 438 , 125 N. Y. Supp. 305 .

[2] The complaint herein does not allege that the cotrustee, McCullough, has openly taken a position of hostility to the enforcement of the mortgage; but it does allege that McCullough has dual interests in the subject-matter of the action which are not harmonious, but are in many respects adverse, and hence he is disqualified to act as a plaintiff in this action. So far as the plaintiff and McCullough are

Under the circumstances of this case, the plaintiff was not obliged to request his cotrustees to join with him as a plaintiff; in fact, a proper performance of his duty would require him to refrain from so doing, in order to avoid the pdssibility of such conduct of the case as might hamper or dela)r or circumvent the proper enforcement of the rights of the bondholders. Any construction of section 448 of the Code of Civil Procedure which would work out a contrary result would sacrifice the intent and spirit of the statute to the mere letter thereof.

The order should be affirmed, with $10 costs and disbursements, but with leave to the appellant to withdraw its demurrer and to answer the complaint within 20 days, on payment of the costs fixed in the order appealed from. All concur.