Murray v. Deyo — 17 N.Y. Sup. Ct. 3

Majority

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AMBROSE S. MURRAY and others, as Trustees, etc., Respondents, v. ABRAHAM D. DEYO, Appellant.

Headnote

Bmb'oad mortgage — trustees taking possession of road under — right of debtor of road to offset claim against the company, fading due after change of possession — Judgment of forecloswre — against whom it may be read in evidence — Witness—what question cads for opinion of.

The YaUtiU Yalley Railway Company having made default in the payment of the interest falling due on mortgage bonds issued by it, the plaintiffs, the trustees under the mortgage, in pursuance of the terms thereof, entered into possession of the road in May, 1873, and received the rents and tolls thereof for the benefit of the bondholders. Subsequently, the mortgage was foreclosed and the road sold to the plaintiffs. This action was brought to recover money due to the road for transporting the mails for the half year, ending December 31,1873, received by the defendant, who had acted as agent for the road in collecting such money from the treasury department, and which he refused to pay over, he claiming to be entitled to set-off against this amount a note given by the company to him in October, 1873, due one year after date. Reid, that as the plaintiffs’ right to receive the earnings of the road became absolute in May, 1873, at which time defendant’s note had not yet become due, no offset thereof could be made in this action.

Upon the trial, plaintiffs were allowed, against the defendant’s objection and exception, to introduce in evidence the judgment, in the action of foreclosure, to which the defendant was not a party. Reid, that this was proper; that the

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mortgage and decree were properly submitted to show the transfer of the title to the plaintiffs.

Upon the trial a witness, who had been employed by one of the plaintiffs, was asked in their behalf: “For whom and in whose behalf did Mr. Burdell make that employment, if you understood?” Held, that the question did not necessarily call for an opinion of the witness, and was properly admitted.

Appeal from a judgment in favor of the plaintiffs, entered upon the trial of this action by the court, without a jury.

This action was brought by the plaintiffs as trustees of the second mortgage made by the "Wallkill Valley Railway Company, dated January 1, 1872. The plaintiffs, as such trustees, claim to recover certain moneys collected by the defendant from the United States government for postal service on the Wallkill Valley Railway, under a contract between that company and the government. The moneys collected were for postal service between July 1, 1873, and January 1, 1874.

The mortgage provided that in case of default, “ it shall and may be lawful, and the said parties of the second part hereby are expressly and fully authorized and empowered to enter upon in that case and take possession of all and singular the said railway and the property and premises hereby mortgaged, and through the agency of the persons they may from time to time ap|3oint to collect and receive the tolls, incomes and profits of said road, hereby conveyed for the purpose of the security aforesaid, and until the same shall be sold or disposed of by them as aforesaid.”

In May, 1873, the plaintiffs took possession of the road under the provision of the mortgage above mentioned.

On the trial one of plaintiffs’ witnesses testified that he was employed in June, 1873, by the plaintiffs as superintendent on this road. He was then asked, “ For whom and on whose behalf did Mr. Berdell (one of the plaintiffs) make that employment, if you understood?” This question was objected to by the defendant as calling for the conclusion of the witness. The witness was allowed to answer, and said: “ For the trustees of the second mortgage bonds.”

A. Sclioorvmaker, for the appellant.

Bacon c6 Dwyer, for the respondents.

The Wallkill Yalley Railway Company executed to tbe plaintiffs, as trustees, a mortgage to secure tbe holders of certain bonds of tbe company. The mortgage was given in January, 1872. It covered tbe railway and its appurtenances, including tbe franchise, all tbe personal property, and all tolls, rents, issues and profits to be derived therefrom. The plaintiffs, as trustees, were on default in payment of tbe interest on tbe bonds for a specified time, and upon a request in writing by a majority of tbe bondholders, authorized and empowered by tbe terms of tbe mortgage to take immediate possession of tbe road and to receive all tbe tolls and rents for tbe security of tbe bondholders. Tbe railway company defaulted in tbe payment of its interest in July, 1872, in part, and entirely on tbe 1st January, 1873, and subsequent. Tbe plaintiffs, by tbe written request of a majority of tbe stockholders, took possession of tbe railway and its property, under tbe mortgage, and subsequently sold tbe same by virtue of a decree of this court. When tbe plaintiffs took possession of tbe road, tbe defendant was tbe agent of tbe 'Wallkill Yalley railway to collect from tbe post-office department of tbe United States tbe moneys earned by tbe railroad for carrying tbe mails thereon. Tbe moneys received by him for tbe half year ending June 30, 1873, be paid to tbe plaintiffs; tbe money be collected tbe next half year, be collected and did not pay over. Tbe amount of tbe collection was $118.44. Tbe railway company gave defendant a note for value on October 1, 1872, due in one year, for $4:55.25. Tbe defendant claims to offset this note in this action.

Upon tbe trial, tbe mortgage to plaintiffs and tbe judgment roll of tbe judgment determining tbe issue and ordering tbe sale of tbe railway between plaintiffs and tbe Wallkill Yalley railway were received in evidence. Deyo was not a party to it, and tbe first question presented is whether they were properly admitted. They were admitted to prove title to tbe moneys in dispute. If tbe Wallkill Yalley railway bad given a conveyance to plaintiffs of tbe right to tbe moneys, no objection could be made to tbe proof of tbe conveyance, even though Deyo was not a party to it. This case is tbe same. Tbe plaintiffs bad a mortgage which could, by default of payment of interest, be made an absolute and perpetual assignment of

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the road and its earnings. The judgment determined the existence of the facts necessary to support it conclusively. Deyo was not a party, but the judgment is a muniment of title against the defendant or any other stranger. The defendant was an agent of the company. He had no title to be overreached by the decree. If he had, his title would not be affected. The mortgage and decree passed all interest from the Wallkill Yalley Railway Company as effectually as if by deed, and was properly received in evidence. (Fuller v. Van Geesen, 1 Hill, 171 .)

The defendant had no right of offset.

The plaintiffs’ right became absolute in May, 1873, to the earnings of the road; defendant’s note did not become due until October following. When the change of title was before the maturity of the note, no offset could be made. (Martin v. Kunzrmuller, 37 NY., 396 .) The plaintiffs put, upon the trial, this question to the witness Jones: “For whom and on whose behalf did Mr. Burdell make that employment, if you understood?” This was admitted, under defendant’s exception, and this ruling is urged for error. I think the question here proposed rather comes under the case of Sweet v. Tuttle ( 11 N. Y., 165 ). There the question was : “ On the part and behalf and for whom were the services rendered? ” This was held not necessarily to call for an opinion. The question in this case does not. A single question further would have rendered it certain whether he related what was said, or only a deduction from what was said. In Nichols v. Kingdom Iron Ore Oo. ( 56 N. Y., 618 ), the question is entirely different: “ For whom did you set up the machinery, as you supposed ? ” This question manifestly called for an opinion of the witness instead of for a fact.

This question becomes unimportant if I am right in the propriety of the introduction of the judgment roll. The evidence taken under the question we are considering was only addressed to the fact of the plaintiffs’ taking possession, in May, 1873, of the road. The roll establishes that fact and fixes its date to. be the 20th May, 1873.

Judgment affirmed, with costs.

Gilbert, J., concurred; Dykman, J., not sitting.