The American Life Insurance and Trust Company, Respondent, v. Harpend V. D. Van Eps, Appellant

The American Life Insurance and Trust Company, Respondent, v. Harpend V. D. Van Eps, Appellant. (Argued February 3, 1874; decided February 10, 1874.) This was an appeal by John C. Yan Eps from order of General Term, affirming an order of Special Term made upon application, under section 321 of the Code, to compel said Yan Eps, the appellant, to pay the costs of certain proceedings herein against Ira Harris, late master in chancery, to compel him to make report of sale and pay over surplus moneys alleged to be in his hands. The action was for foreclosure. A decree of foreclosure and sale was perfected in 1841, the execution of which was intrusted to said Harris, as master. He sold the premises, and a surplus arose from the sale. In 1837 Fancy Yan Eps, wife of Evert Yan Eps, owned the premises. In April of that year she conveyed the same to one Spencer, subject to a mortgage thereon of $500. Spencer gave for the balance of the purchase-money a bond, secured by mortgage, to defendant, Harpend Y. D. Yan Eps, son of Evert and Fancy. He, thereupon, made a declaration of trust reciting the facts, and declaring that he held the mortgage in trust for Fancy and her heirs, to receive the interest and pay the same over to said Evert and Fancy during their lives, and to divide the residue between himself and the other heirs on their decease. The first mortgage was assigned to and foreclosed by plaintiff, and, in 1840, said Harpend became the purchaser, giving a new mortgage for a portion of the purchase-money, which was the mortgage in suit. Said Harpend was removed from the trust and one House appointed trustee in his place. In 1857 said House made application to the Supreme Court for an order requiring said Harris to make a report of sale and to pay over the surplus moneys. The motion was denied. An appeal was taken to the General Term, and from there to the Court of Appeals, where the order was affirmed, and a judgment for $341.88 was perfected, in 1869, against said House. It was discovered by Harris, after perfecting judgment, that, in 1860, before the appeal to the General Term, House was removed, as trustee, and John C. Van Eps appointed in his place, and that the appeals were taken by him. Thereupon this application was made. It was granted, upon the ground that the first foreclosure sale destroyed the trust; that John C. Van Eps did not become a trustee by appointment, but was the owner of a share in the property once of the trust estate, and was, in fact, prosecuting what was his own right, and so liable personally for the costs. Reid, that if the trust had been of real estate, and, by virtue of the sale under judicial sentence, the trust as to it was destroyed, still the trustee might hold to the surplus remaining his official relation, and was the person to have and demand them, and was still charged with the duty to recover and distribute them; but that the trust estate, finally represented by the surplus moneys was never real estate, as the mortgage, not the farm, was the subject of the trust; that the trust did not cease, but, by the judicial sale, was transferred into an equitable lien upon the surplus moneys; that, therefore, the right or cause of action (conceding that the proceeding was an action within section 321 of the Code) alleged in the petition of House was one which, if it existed, he had as trustee; and the appellant, John 0. Van Eps, having succeeded him as such trustee, he was not liable personally for the costs ; also, held, that this result was not affected by the fact that he would ultimately have been benefited if the proceeding had been successful; also, that, granting that the order for costs authorized an execution against House personally, it gave no authority for seeking an attachment against the person of Van Eps, he succeeding House simply in his official capacity. G. C. Ripsom for the appellant. George W. Miller for the respondent. [MAJORITY — Folger, J.,] Folger, J., reads for reversal of order and denial of application. All concur. Ordered accordingly.