Wait v. Weller

In 1870 the W. and F. R. R. Co. executed a mortgage upon their road for $125,000 to the Union Trust Company, as trustee. In 1872, desiring to increase their funded debt, another mortgage for $175,000, described as a first mortgage, was executed to the appellant, the company intending to take up the $125,000 mortgage. This project failed, as some of the holders of the first bonds refused to surrender them. Subsequently the property of the road was sold under a judgment and a new company organized. An action was then commenced by the appellant, the trustee of the second mortgage, to foreclose it, the new road and the Union Trust Company being made parties to the suit. The plaintiff, the holder of some of the bonds issued under the second mortgage, applied for and obtained an injunction restraining the appellant from proceeding in that action until he procured the surrender of all the bonds issued under the first mortgage. Held, that the injunction was improperly granted and should be vacated.

Appeal from an order made at the Special Term continuing an injunction restraining the appellant from foreclosing a mortgage until the conditions on which the bonds were issued should be fulfilled.