Misc.] Supreme Court, January, 1918. tional security of the maker and the indorser, and plaintiff, instead of taking the position that there had been unreasonable delay in demanding payment and, therefore, he was discharged, acceded to such request and assigned the legacy to the bank "as collateral and continuing security" for the payment of the notes with interest. Held, that by the assignment, which is held valid, plaintiff recognized his then existing liability as indorser and it was fair to assume that the circumstances were such that the parties believed that the notes were to run for some time and that the security was to continue so long as the notes remained unpaid. That the defendant trustee upon the evidence was entitled to the relief sought against plaintiff for the cancellation of the interest in the mortgage inadvertently assigned to plaintiff. ACTION to have certain promissory notes, and an assignment of a legacy as security for the notes, adjudged void. Alfred D. Van Buren (Howard Chipp, of counsel), for plaintiff. Thomas F. Gilroy, Jr., for defendant Wensley. Merchant, Olena & Merchant, for defendant First National Bank of Saugerties and others. James A. Betts, for National Ulster County Bank of Kingston. William E. Risley, for defendant Edmund Risley. CHESTER, J. The plaintiff seeks by this action to have two promissory notes made by the defendant DeWitt Van Buren, to the order of his father, the plaintiff, and indorsed by the latter, which were discounted by the defendant First National Bank of Saugerties, for the maker, adjudged to be void; to have an assignment made by the plaintiff to such bank of a certain legacy to him as collateral security for such notes adjudged void for want of consideration; to have an assignment of an interest in a certain mortgage delivered by the defendant Wensley, as trustee, Supreme Court, January, 1918. [Vol. 102. to the plaintiff in part payment of such legacy and afterwards returned by the plaintiff to such trustee, delivered back to the plaintiff, and also to have the rights and priorities of the several parties as assignees of another legacy under the same will adjudicated upon and determined. The defendant-trustee seeks equitable relief against the plaintiff and also seeks an affirmative judgment against him for moneys paid to him on account of such legacy in disregard of the assignment thereof to the First National Bank of Saugerties and inadvertently overlooked by the trustee upon the judicial settlement of his trust. There is no substantial dispute about the facts. One Rachel A. Elting, a sister of the plaintiff, died in New York county in 1907. By her will which was probated there, the defendant Robert L. Wensley became the trustee of two trusts, one of $8,000 to pay the income to the plaintiff until his daughter, Mildred, became twenty-one years of age, then to pay $2,000 thereof to said Mildred, and $1,000 thereof to each of two sons of his, Alfred D. Van Buren and Augustus H. Van Buren, Jr., and the balance, $4,000, to the plaintiff, and of another trust of $10,000 for the benefit of the defendant DeWitt Van Buren, another son of the plaintiff, to be paid to him on his reaching the age of thirty-five years. Mildred Van Buren became twenty-one years of age on October 3, 1914, and De Witt Van Buren became thirty-five years of age on August 25, 1916. The defendant-trustee invested $2,500 of the Augustus H. Van Buren trust and $9,500 of the DeWitt Van Buren trust in a bond and mortgage for $12,000 upon New York city real estate, which he still holds. On July 1, 1912, the defendant DeWitt Van Buren made his two promissory notes dated on that day, one for $2,500 and one for $1,875 each payable to the order Misc.] Supreme Court, January, 1918. of his father, the plaintiff, at the First National Bank of Saugerties, on demand after date for value received, with interest. The plaintiff indorsed each of these notes for the accommodation of the maker and the maker discounted them to the extent of $3,875, at such bank which still holds them. The entire amount of principal and interest remains unpaid. Some time in December, 1913, the First National Bank of Saugerties requested the defendant DeWitt Van Buren to give it some security for his notes and De Witt drew an assignment to the bank of the $4,000 legacy above mentioned and procured his father to sign the same. De Witt Van Buren delivered this assignment to the bank and sent a copy of the same to the defendant Wensley a day or two after it was given and received back an acknowledgment of its receipt. The assignment made by the plaintiff to the bank bore date December 23, 1913, and recites that the plaintiff indorsed the notes in question, that the bank had requested him and his son DeWitt to give additional security for the payment of said notes and that they were willing to comply with such request. By this instrument the plaintiff assigns all his right, title and interest in and to the legacy of $4,000 contained in the will of Rachel A. Elting" as collateral and continuing security for the payment of said promissory notes so executed by said DeWitt Van Buren and indorsed by said party of the first part (plain tiff) with interest." The next day, December 24, 1913, defendant DeWitt Van Buren made his promissory note dated on that day for $700 payable to the order of and indorsed by Alfred D. Van Buren at the First National Bank of Saugerties on demand after the date, with interest, and said DeWitt Van Buren discounted such note at said bank. On the same day DeWitt assigned to the bank his own legacy of $10,000 as col Supreme Court, January, 1918. [Vol. 102. lateral security for this loan subject to two prior assignments of such legacy, one made by him to secure a $5,000 loan from the National Ulster County Bank and one to secure a $1,700 loan from one George W. Elting, who has since died. On October 20, 1914, a decree was duly entered in the Surrogate's Court of New York county on an accounting by the defendant Wensley, as trustee of the A. H. Van Buren trust fund, which directed the distribution of such fund in the manner provided by the will and immediately thereafter the trustee made a distribution under the decree and delivered to the plaintiff an assignment to him of a $2,500 interest in the $12,000 bond and mortgage above mentioned. The trustee also paid to the plaintiff in cash on account of the legacy the sum of $1,329 and two items of interest on the mortgage of $62.50 each. The First National Bank of Saugerties was not made a party to the accounting. These payments were made by the trustee notwithstanding the assignment made by the plaintiff to the bank of his legacy. The trustee claims that he had been ill and had forgotten all about such assignment. Afterwards the trustee sought in vain for a return from the plaintiff to him of the assignment of the $2,500 interest in the mortgage and of the moneys paid to the plaintiff and finally obtained an order against the plaintiff to show cause from the surrogate in the matter. Upon the return day of the motion, the plaintiff asked an adjournment which the surrogate granted upon the plaintiff's surrendering to the trustee the assignment of the mortgage, which assignment had not been recorded. The surrogate subsequently opened the account of proceedings and vacated the decree of distribution so far as it ordered payment to the plaintiff, but left the trustee to other recourse for collecting back the money which had been Misc.] Supreme Court, January, 1918. paid over. The matter is still pending. The fact that the trustee inadvertently omitted to make such bank a party to the accounting after notice of its interest and inadvertently made distribution of the trust funds to the plaintiff after he had parted with his interest cannot relieve the trustee from his liability to the ones lawfully entitled thereto. The question is first presented as to the propriety of the Supreme Court taking jurisdiction of some of the matters involved in this action when the same matters are up for determination in the Surrogate's Court in two accountings, in prior proceedings still pending in that court between the same parties, under the two trusts above mentioned. Notwithstanding the Supreme Court has concurrent jurisdiction with the Surrogate's Court in proceedings for accounting of testamentary trustees, the former court will not ordinarily take jurisdiction of such matters where the same questions are involved in prior proceedings between the same parties in the latter court. Here, however, some questions are presented by the answer of the defendant Wensley, as trustee, in which he seeks affirmative relief against the plaintiff which it is doubtful whether the Surrogate's Court has jurisdiction to determine even under the broad powers now given to such court. Under such circumstances I think the Supreme Court should entertain this action and proceed to a determination of the questions involved. The plaintiff insists that the notes which he indorsed cannot be enforced against him because the bank did not demand payment and give notice of dishonor within a reasonable time. They were dated July 1, 1912, and were payable on demand after date." Demand was not made and notice of protest given until August 24, 1916, over four years after date. |