Opinion
May 24, 1907.
Charles Goldzier, for the appellant.
Van Mater Stillwell, for the respondent.
Elbert B. Hamlin, as trustee in bankruptcy for the defendant corporation, in an action to foreclose a certain mortgage for $25,000, on which a payment of $10,000 had been made, and who had been permitted to intervene and defend in behalf of the corporation, defaulted upon the trial by reason of a misunderstanding between himself and the attorney for the plaintiff. An order opening the default has been granted, upon terms, and this appeal is from so much of the order as requires the trustee to furnish an undertaking for $5,000 conditioned for the payment to the plaintiff of any deficiency that may arise upon the sale of the premises by reason of the delay occasioned by the default.
There does not appear to be any occasion for the imposing of this personal obligation upon a trustee in bankruptcy, the officer of a court of the United States, and we reach the conclusion that the order appealed from should be modified by striking out the provision for a bond on the part of the trustee, and as so modified, the order should be affirmed, without costs.
PATTERSON, P.J., McLAUGHLIN and CLARKE, JJ., concurred; INGRAHAM, J., dissented.
It is conceded that the defendant as trustee in bankruptcy has no assets in his hands, but is seeking to defend a mortgage made by the bankrupt for the benefit of creditors. They should certainly be responsible for any damages caused by the delay in foreclosing the mortgage in the event that the defense is unsuccessful. The trustee in bankruptcy being in default I think it was proper for the court to compel the creditors to give such security as would indemnify the plaintiff for the damages which would be caused by the delay if the defense proved unsuccessful.
The order should be affirmed.
Order modified as directed in opinion, and as modified affirmed, without costs.