King v. Merchants' Exchange Co.

*King v. Merchants’ Exchange Co. Mortgages in trust. — Right of appeal. The statutes, regulating trusts in real estate, have no application to securities by way of mortgage; a mortgage in trust to secure the bonds of the mortgagor held by different persons, is valid. No appeal lies from a decision upon a question of practice, addressed to the discretion of the court; such as, the denial of leave to file exceptions to the report of a referee, after the time for doing so has expired. An appeal does not lie from an order, denying a rehearing upon an interlocutory decree. Appeal from the general term of the Superior Court of the city of New York, where a decree had been made in favor of the plaintiff, in a suit for the foreclosure of two mortgages, and a petition for a rehearing had been denied. (Reported below, 2 Sandf. 693.) This was a bill in equity filed in the late court of chancery, by James G. King, against the Merchants’ Exchange Company and several of the persons holding the bonds of that company, secured mortgages to the plaintiff, for a sale of the mortgaged premises and a foreclosure of the equity of redemption. After the cause was at issue, it was transferred to the superior court of the city of New York, by an order of the supreme court. *On the 25th May 1838, the Merchants’ Ex-. change Company executed to the plaintiff a mortgage upon their real estate, bounded by Wall, William and Hanover streets and Exchange place, in the city of New York, in trust for the use, benefit, security, protection and indemnity of the holders of the bonds of the said company, therein specified; and on the 30th March 1840, they gave the plaintiff another mortgage, in trust for other bond-holders; the whole amounting to $700,000. *On the 1st January 1848, the principal of the bonds secured by the first mortgage having fallen due, and not being paid, the bond-holders required the plaintiff to foreclose; and this suit was brought for that purpose. *The Merchants’ Exchange Company answered the bill; but when the cause came on for a hearing, on the 20th June 1849, they did not appear by counsel, and a decree was made, declaring the bonds and mortgages to be valid; that the mortgages were liens upon the premises in the order of their dates; and referring the cause to a referee, to take the .accounts of the plaintiff, as mortgagee in possession, and compute the amount due upon the bonds mentioned in the said mortgages. On the 10th January 1850, the referee filed his report, which was excepted to by some of the defendants, but not by the Exchange Company. *On the 2d February 1850, the Exchange Company petitioned for a rehearing upon the matters embraced in the decretal order made on the 20th June 1849, on the ground that their counsel was accidentally absent, when the case was heard; that the then directors were bond-holders, and interested in sustaining the mortgages; and that a new board of directors had been elected who were advised that the mortgages were illegal and void, and desired to have that question reviewed. They also asked leave to file exceptions to the report of the referee. *The petition for rehearing, and for leave to file exceptions to the referee’s report, was denied, on the 1st February 1850; and on the 20th March, a final decree was made, confirming the report of the referee, ordering a sale of the mortgaged premises, and the payment out of the proceeds of sale, of the amount reported to be due on the bonds, in the order named. The Merchants’ Exchange Company, thereupon, took this appeal. The notice of appeal stated that the court would be asked to review and reverse the decretal order of 20th June 1849; the order made on the 16th February 1850, denying a rehearing, <fcc.; and also the final decree. Gutting, for the appellants. Lord, for the respondent. [MAJORITY — *f00T> —] *f00T> — The bill in this cause was filed by the respondent to foreclose two mortgages executed to him, as trustee, to secure the payment of numerous bonds executed and delivered by the apP8^an^s ^individuals, for money borrowed of them for the purpose of erecting their building in the city of New York, known as the “Merchants’ Exchange.” The only issue which the appellants raised in their answer, affecting the merits, was on the giving of the bonds and mortgages, and the receipt of the money for which the bonds were issued; and the only objection stated in the answer to the foreclosure, was the want of proper parties — the appellants insisting that all the bond.-holders should be parties, and denying an allegation in the bill that they were too numerous to be made parties. The facts put in issue by the answer were fully proved, and the respondent was of course entitled to a decree. The cause was transferred, under the statute, to the superior court of the city of New’ York, and that court, on the 20th June 1849, made an, interlocutory decree in favor of the respondent. By that decree, certain matters Avere referred to a referee, who proceeded to examine them, and made his report thereon. After it was made, and in February 1850, the appellants applied by petition, to the superior court, for a rehearing, and for leave to file exceptions to the report of the referee, the time for that purpose having expired, without any having been filed. An opposing affidavit and papers were presented, and the court, after hearing counsel for the respective parties, denied the motion, on the 16th of February 1850. A final decree was made in favor of the respondents, in March followfing, and from that decree an appeal is taken to this court. We are first asked to review the order denying the appellants’ motion for a rehearing, and for leave to file exceptions to the report of the referee. The denial of leave to file exceptions is clearly a matter of discretion, and by several decisions of this court, made on the law as it stood before the passage of the amended code of 1851, is not the subject of an appeal. (Wakeman v. Price, 3 N. Y. 334, and cases there cited.) Nor does it fall within the 2d subdivision of § 11 of the code of 1851, which was then first enacted, for the code only applies to “ every actual determination thereafter made.” (Mayor of *New York v. Schermerhorn, 1 N. Y. 423; Selden v. Vermilya, Id. 534.) In respect to a refusal of the rehearing, it is sufficient to observe, that the application was to rehear an interlocutory order, from which no appeal lay to this court; certainly, not on such an order, made before the amended code of 1851 was passed, and probably, not one made since; and this court has decided that an appeal does not lie to it from an order refusing the rehearing of an unappealable order. (Marvin v. Seymour, 1 N. Y. 535.) We are, secondly, asked to decide, that the trust to the respondent is void, because it is a trust of real estate, and not permitted by our statutes. (1 R. S. 728, § 55.) The mortgages in question contain the usual provisions of such instruments, and each of them a trust clause, as follows: “ in trust, nevertheless, to and for the use, benefit, security, protection and indemnity of the respective holders of the said bonds.” It has often been decided by the courts of this state, and is perfectly well settled, that a mortgage is a lien upon, and not a title in or-to lands — is a mere security for a debt — and that tho interest of the mortgagee is a chattel interest, and with the debt which it secures, passes, on the death of the mortgagee, to his personal representatives, as does his other personal property; while the title to the land remains in the mortgagor, and on his death descends to his heirs-at-law. Our statute, therefore, regulating trusts in real property, has no application to a security by mortgage. The objection to the validity of the mortgages, on this ground, is probably an after-thought, for the answer does not even allude to it. We do not, however, place our decision on this omission in the answer, but on the validity of the trusts contained in the mortgages. Our attention was directed, on the argument, to various other minor objections to the decree, but they do not appear to require particular notice. Decree affirmed.