Hughes v. Chicago, Milwaukee & St. Paul Railway Co.

Headnote

Trustee to receive income for benefit of bondholders, &e.—when incapacitated by removal to foreign country—right to delegate trust—right to receive income and consequent compensation, when waived.

Appeal from judgment dismissing complaint on the merits.

. This action was brought to recover damages for non-employment of the plaintiff by the defendant under a certain trust deed or mortgage executed November 30, 1864, to secure $1,500,000 of bonds issued by the defendant. A sufficient statement of-the pleadings appears in 45 Super. Ct. 114.

By the mortgage in question, the plaintiff and John P. Yelverton were appointed trustees for the purposes therein mentioned, and to be compensated for the services which they might render, as therein prescribed. Mr. Yelverton died about January 1, 1867. In May, 1866, the plaintiff left the city of New York and went to France, where he resided ever since. Once in two years he returned to this country upon visits lasting from three to five weeks each. On July 1, 1875, the plaintiff gave to N. A. Cowdrey a power of attorney under seal, purporting to authorize Cowdrey to perform all the duties of trustee. Thereupon a majority of the bondholders, assuming to act under a provision of the mortgage, appointed the Farmers’ Loan and Trust Company as trustee under the mortgage in place of Yólverton, deceased, and Hughes, incapacitated. The appointment was accepted by the trust company.

The court, at General Term said : “ On an application made by the trust company to the supreme court to enjoin the plaintiff from acting, the general term of that court ( 11 Hun, 130 ) held that the plaintiff had. incapacitated himself from acting as trustee by removing to a foreign land and becoming a resident thereof, and that under the mortgage he could not make a complete delegation of his powers and duties as trustee to an attorney in the manner attempted by him. Upon a careful examination of the case at bar we cannot help arriving at the same conclusion.....

“ The appellant insists, however, that at all events he was in the city of New York from April 10, 1865, to

May, 1866, and that the action should be sustained for at least that period, because a number of the bonds known as the Chamberlain bonds could and should have been redeemed with the income of this period. A number of these bonds were in fact so redeemed. But the payments were made directly by the company to Mr. Chamberlain, and without any dissent on the part of the plaintiff, though he knew of it......

“ Whatever his rights, with reference to these Chamberlain bonds, or the income applicable to them during the years 1865 and 1866, may have been originally, they were clearly waived by him.”