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the proceeding in the Surrogate's Court and in Smith v. Butler. During this entire controversy the facts upon which John Ward's title is based were as well known to one party as to the other, neither was misled, and the fact, if it be a fact, that counsel for complainant has changed his position as to the legal effect of the purchase by John is not material upon any of the issues involved.

In Brewster v. Striker, 2 N. Y. 41, it is said: "But again, the alleged admission was not of a fact. but of a conclusion of law. The will itself, and the clauses it contains, are not, and never were, as matters of fact, in dispute; but the construction of those clauses, and the estate and interest taken by the devisees under them, upon which the controversy turns, are questions of law. The grandchildren, at the time of the partition, doubtless supposed the devise of the real estate to them to have the legal effect to vest in them the estate in equal shares, as tenants in common, in fee simple absolute, and on such erroneous supposition they acted in the partition they assumed to make. But could that mistake of the law be urged and used against either party, to estop him from afterwards claiming and asserting his rights under the true exposition of the will?

This question was answered in the negative.

Every right which the complainant ever had to assert the invalidity of John's title he now possesses.

What has been said already disposes of the alleged agreement between counsel that William and Charles should not assert title through descent from John, but that they should take the position that their interests were not assignable and that the mortgages and foreclosure sale did not transfer the title to those interests. The burden is upon the complainant to establish this agreement and it cannot be said that this has been done in the face of the denial by counsel for defendants that such an agreement was made.

The court has looked in vain through the family history and the complicated transactions of the firm of Ward & Co. for a solution of this controversy. The relations between the brothers seem to have been of the most cordial and friendly nature and each seems to have been willing to make personal sacrifices to sustain the honor and business reputation of the family. Not only was this true of the brothers, but other members of the family seem to have been actuated by the same spirit until this unfortunate misunderstanding arose.

It is not thought necessary to decide, even were it possible to do so, who was responsible for the failure of the firm and the disasters which followed. The situation is so complicated, the meager accounts presented so inconsequential, the interests of the parties so complex—with rights crossing, recrossing, combining and separating at every stage-that it is impossible to draw any satisfactory deduction therefrom adverse to the conclusion which the law attributes to the undisputed acts of the parties.

The authorities cited in the defendants' brief seem to establish conclusively the proposition that the wife of Charles had no dower right in the property covered by the mortgage to Butler. Durando v. Durando, 23 N. Y. 331; House v. Jackson, 50 N. Y. 165; Clark v. Clark, 84 Hun, 362, 32 N. Y. Supp. 325.

There can be no impropriety in saying that the court entered upon the examination of this cause with the hope that a conclusion might

be reached which would permit the distribution of the estate in question according to the intention of the testator. But the obstacle in the path of such a result was the act of the complainant himself in transferring the title upon which his rights depended. Were all the parties to this transfer alive it might, perhaps, be explained in accordance with the theories which are now advanced; but the court has been compelled to the conclusion that the deliberate and solemn act by which Charles parted with his title cannot be overthrown by mere inference and presumption.

It follows that the defendants are entitled to a decree substantially as stated at the conclusion of their main brief.

It would seem that a settlement of the amount in the hands of the trustee might be reached by agreement, but if this should prove impossible a master will be appointed to pass the account.

BRINCKERIIOFF y. ROOSEVELT et al.

(Circuit Court, E. D. New York. August 2, 1904.)

1. CORPORATIONS-LIABILITY OF OFFICERS-NEGLIGENT MANAGEMENT OF COR

PORATE BUSINESS.

Defendant was president and trustee of a building association, and, in connection with other trustees, who were authorized to transact the business of the association, made a sale of real estate, which constituted its only property, to a trust company, of which he was also president and a large stockholder, in exchange for certain securities, which were of doubtful validity and value. A bond and mortgage, however, were taken from the trust company as a guaranty of the collection of the securities to the amount of the agreed price of the property, but by agreement the mortgage was not recorded. The trust company desiring to sell the property, defendant procured the passage of a resolution by the trustees of the building association authorizing the cancellation of the mortgage, and it was so canceled, without the knowledge or consent of the stockholders. The trust company was or became insolvent, and nothing was ever realized by the building association from the securities. Held, that the cancellation of the mortgage operated as a fraud upon the association, by depriving it of its only valid security, and rendered defendant individually liable for the price of the property, which liability could be enforced at the suit of a

stockholder; the association having refused to bring the suit. 2. SAME.

Such suit could be maintained without first exhausting the remedy against the trust company, since the mortgage could have been similarly

enforced 3. SAME.

Shortly after the securities were transferred to the association the trustees caused the loans to be called and the securities sold at auction, the purpose being to cut off outstanding equities. They were bid in for the association for a sum fixed by the trustees, which exceeded or equaled the price for which the real estate had been sold. Held, that such sale did not bind the association as to the value of the securities, as between it and

the trust company, nor affect its right to enforce the bond and mortgage. In Equity. Suit by stockholders.

Duncan & Duncan (Frederick S. Duncan, of counsel), for complainant.

George C. Kobbe (George H. Yeaman and John E. Roosevelt, of counsel), for defendants.

THOMAS, District Judge. The Holland Building Association was organized in January, 1890, for "purchasing, taking, holding, and possessing real estate and buildings in thie city of New York, and selling, leasing, and improving the same." Its capital stock, of $100,000, was

, $ divided into 1,000 shares, of $100 each. All of the capital stock was fully paid in. On February 1, 1890, it purchased and came into pos; session of 33 Nassau street, in the city of New York, for which it paid $92,500 ; taking title subject to a mortgage of $82,500 held by Stuart. Thereafter, to March 16, 1891, the building association leased the property for sufficient sums to pay all expenses, corporate expenses, and 5 per cent dividends upon its stock, and had a surplus of about $1,000. The defendant Roosevelt and Mr. Van Siclen, as president and secretary, respectively, of the building association, executed a deed stating a consideration of $135,000, dated March 16, and acknowledged March 18, 1891, of 33 Nassau street, to the Holland Trust Company; and the same persons, as president and secretary of such trust company, executed a bond and mortgage, dated March 16, 1891, and acknowledged March 31, 1891, to the building association, which mortgage was never recorded. In connection with this conveyance, there was transferred to the trust company $3,900.81 then remaining in the treasury of the building association. No money was paid to the building association, but there was transferred to it certain promissory notes, of the nominal amount of $140,000, held by the trust company, executed by J. W. Coffin, Coffin & Co., Moritz Lippmann, and Coffin & Lippmann, indorsed, “Without recourse, Holland Trust Company, R. B. Roosevelt

, President." These notes and the accompanying collateral are herein called the “Brigantine Securities.” There was no resolution of the trustees of the Holland Trust Company authorizing such transaction, nor was there any written agreement therefor, except so far as shown in the bond and mortgage and deed. At a special meeting of the trustees of the association held March 12, 1891, at which were present Robert B. Roosevelt, president, William Remsen, John D. Vermeule, G. Van Nostrand, and George Van Siclen, secretary, the following resolution was unanimously passed :

"Resolved that the officers of this company be and they hereby are authorized, empowered and instructed to accept from Holland Trust Company as the consideration for the deed of No. 33 Nassau street, subject to the existing mortgage to Stuart Estate instead of $100.000 cash, all the indebtedness due llolland Trust Company from Brig:

wtine Beach R. R., Brigantine ('ompany. J. W. Collin & Co., Moritz Lippmann, Cofin & Lippmann and their kindred companies at Brigantine Beach, V. J., with all the collateral belonging thereto for the sum total of the face value of said indebtedness being with accrued interest about $140,000 in amount, provided Holland Trust Company guarantee the payment of $100,000 therefrom to this company and also guarantee 6% per annum dividends on $100,000 to this company so long as we hold said indebtedness, and that Holland Trust Company execute and deliver its bond and mortgage for $ 100,000 on said 33 Nassau street subject to the existing mortgage for $82,500 held by the estate of Jane Stuart as collateral to said guarantee, said mortgage for $100,000 not to be recorded ; with the privilege or call to said trust company to buy back said indebtedness and collateral at any time for $100,000 cash, on payment of all unpaid dividends aforesaid due this company, and pro

portional dividends up to such time, the dividends, income and profits on said Brigantine and Lippmann and Coffin matters to belong to said Holland Trust Company in consideration of said guaranteed dividend, call, and guarantee.”

At a meeting of the executive committee of the building association held March 21, 1891, at which Robert B. Roosevelt and George W. Van Siclen were present, the following resolutions appear:

“Moved that the deed of this company to Ilolland Trust Company in accordance with a resolution of the board of trustees passed at its special meeting held March 12th, 1891. Carried.

"Moved that the loans and securities of Brigantine Beach and Coffin et al. be accepted from Holland Trust Company together with a mortgage for $100,000 on number 33 Nassau street, as collateral, in full payment for said premises.

"On motion, ordered that the officers draw and pay a check for $3,900.81 to llolland Trust Company on account of the adjustment of the sale of premises and purchase of securities aforesaid.”

The mortgage executed by the trust company to the association, among other things, contained the following:

"Whereas, the said party of the first part is justly indebted to the said party of the second part, in the sum of One hundred thousand dollars lawful money of the United States, secured to be paid by a certain bond or obligation, bearing even date herewith, conditioned for the payment of the said sum of One hundred thousand dollars, to be realized, with interest thereon payable half yearly, within three years from the date hereof, from the proceeds of the promissory notes of Coffin & Co., J. W. Coffin, Coflin & Lippmann and Moritz Lippmann, with the collateral thereto, this day purchased by the party of the second part from the party of the first part it being thereby expressly agreed, that the whole of the said principal sum shall become due after default in the payment of interest, taxes or assessments as hereinafter provided.

"Now this indenture witnesseth, that the said party of the first part, for the better securing the payment of the said sum of money mentioned in the condition of the said bond or obligation, with interest thereon, and also for and in consideration of the sum of one dollar paid by the said party of the second part, the receipt whereof is hereby acknowledged, doth hereby grant and release, unto the said party of the second part, and to its successors and assigns forever: [Here follows description of premises, etc.).

“And the said party of the first part covenants with the said party of the second part as follows:

"First. That the said party of the first part will pay the indebtedness as hereinbefore provided, and if default be made in the payment of any part thereof, the party of the second part shall have power to sell the premises herein described, according to law.

“Second. That Holland Trust Company the said party of the first part, will execute any further necessary assurance of the title to said premises and will forever warrant said title.

"Fourth. And it is hereby expressly agreed that the whole of said principal sum shall become due at the option of the said party of the second part after default in the payment of interest for thirty days, or after default in the payment of any tax or assessment for thirty days after notice and demand."

Thereupon provision is made for enforcing the mortgage in the case of default.

The bond, among other things, states:

“The condition of the above obligation is such, that if the above-bounden IIolland Trust Company cause to be paid unto the above-named Ilolland Building Association, its successors or assigns, the sum of One hundred thousand dollars with interest thereon at six per cent. per annum from the date hereof, payable half-yearly on the first days of February and August in each year, the first payment to be made August 1st, 1891, said sum of One hundred thousand dollars, and interest aforesaid to be realized and paid on or before January 25th, 1895, from the promissory notes of J. W. Coffin, Coffin & Co., Moritz Lippmann, and Coffin & Lippmann with the collateral hereto which Hollanı Building Association has purchased from Holland Trust Company, then the above obligation to be void, otherwise to remain in full force and virtue.”

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As a result of this transaction, the building association had no assets whatever, except such bond and mortgage and the Brigantine securities, which were stocks and bonds issued by companies organized to develop an island known as “Brigantine Island," in the state of New Jersey. No interest had been paid on these loans for over a year prior to their transfer. Therefore the building association was. as regards the subject of the collateral to the Brigantine loans, in the position of dealing with matters beyond its chartered rights.

There is some confusion as to the price agreed to be paid the association for 33 Nassau street. The deed fixes the sum at $135,000, and the conveyance was subject to the Stuart mortgage. The resolution of March 12th states that the Brigantine loans and collateral shall be accepted "instead of $100,000 cash," with the trust company's bond and unrecorded mortgage for $100,000 as collateral, but with privilege to the trust company to buy back "at any time" the Brigantine loans and collateral for $100,000 cash, on payment of unpaid dividends; the trust company meantime being entitled to the “dividends, income, and profits” on the Brigantine "matters.” But the subsequent resolution of March 21st provided that the Brigantine securities, together with a mortgage for $100,000 on 33 Nassau street as collateral, be accepted "in full payment for said premises.” The bond acknowledged March 31st was conditioned for the payment of $100,000, with semiannual interest; "said sum

and interest aforesaid to be realized and paid on or before January 25th, 1895, from the promissory notes of J. W. Coffin and Coffin & Lippmann with the collateral hereto which Holland Building Association has purchased from Holland Trust Company.” The mortgage recites indebtedness to the amount of $100,000 by the trust company, and undertakes to recite the condition of the bond, and the mortgagor covenants to pay the indebtedness.

The agreement, as gathered from the resolutions and bond and mortgage, seems to be that the association should accept the Brigantine securities for 33 Nassau street, and that on or before January 25, 1895, it should realize $100,000 and interest thereon from them, and that the trust company would assure the receipt thereof. According to this, the property was sold for the Brigantine securities, whatever their value, and an assurance of $100,000 and interest, on or before the date fixed. The Brigantine securities, in themselves, were at the time practically worthless, but the bond and mortgage furnished a consideration to the extent of $100,000 and interest.

The first question relates to the sufficiency of the price. There was a very close relation between the Holland Trust Company and the building association. From 1890 to 1894, Robert B. Roosevelt was a trustee, member of the executive committee, and president of the Holland Building Association, and was at the same time trustee, member of the executive committee, and until July, 1892, president of the trust company. J. W. Van Siclen was, until the latter part of 1892, sec

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