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Farmers' Loan & Trust Co. v. Westchester County Waterworks Co.

Supreme Court of New York, Appellate Division

February 17, 1911

FARMERS' LOAN AND TRUST COMPANY, Respondent,
v.
WESTCHESTER COUNTY WATER WORKS COMPANY and Others, Defendants, Impleaded with LOUIS MARSHALL, Appellant, and MUNICIPAL TRUST COMPANY, LTD., and Others, Respondents.

APPEAL by the defendant, Louis Marshall, from so much of a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 1st

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day of August, 1910, upon the decision of the court, rendered after a trial at the Westchester Special Term, as denies and dismisses the said defendant's claim to a lien for legal services upon the award of commissioners in a condemnation proceeding instituted by the board of water commissioners of the village of White Plains.

COUNSEL

Louis Marshall, for the appellant.

Charles Haldane [David McClure with him on the brief], for the plaintiff, respondent.

Stephen H. Olin, for the respondents Municipal Trust Company, Ltd., and John E. Woodruff.

James Kearney, for the respondent Becker.

WOODWARD, J.:

The Westchester County Water Works Company was the owner of certain property, including a franchise to furnish water to the village of White Plains. On the 1st day of July, 1886, it executed and delivered to the plaintiff, as trustee, a mortgage upon its property and franchise to secure an issue of bonds amounting to $100,000, which bonds were payable July 1, 1906. On the 1st of January, 1890, the water works company issued a second mortgage upon its property to the same trustee to secure bonds aggregating $200,000, maturing in 1906, with a provision in the mortgage that $100,000 of said bonds were to be retained by the plaintiff to retire at maturity the issue of first mortgage bonds. All of the first mortgage bonds and $100,000 of the second mortgage bonds were sold. On the 2d day of September, 1896, the board of water commissioners of the village of White Plains commenced a proceeding in condemnation for the acquisition of all of the property of the Westchester County Water Works Company, which resulted in a judgment condemning the property for public use in October of that year, and commissioners of appraisal to determine the compensation to be paid therefor were duly appointed. As a result of this litigation, which lasted for about thirteen years, there came into the hands of the plaintiff, as trustee under the two mortgages, the sum of $211,818.50, and this action was brought by the trustee for the purpose of getting a judicial determination of the rights of the

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several claimants to this fund. The trustee, as such, has no interest in the disposition which is made of any particular claim; it is merely before the court for instructions as to the manner of disbursing the fund.

The complaint alleges the necessary facts to give jurisdiction of the action, and among other things alleges that the appellant, an attorney at law, for himself and as assignee of a firm of which he is a member, 'claims a lien upon the fund in plaintiff's hands to the extent of $10,000, claimed to be the value of legal services rendered by him and by said firm, as attorneys for the Westchester County Water Works Company in the special proceeding above referred to.' The Westchester County Water Works Company, in an unverified answer made by the defendant Marshall's firm, admits the principal allegations of the complaint, and alleges that the services of the appellant were reasonably worth the sum of $10,000 claimed by him, and that he is entitled to a lien upon the fund to the extent of that sum, and asks that it be adjudged that the appellant 'has a lien or claim on the fund in the hands of the plaintiff to the extent of $10,000, and that the said sum of $10,000, together with interest from the 23rd day of June, 1909, be paid to him out of the said fund.' The defendant Marshall admits in his answer the material allegations of the complaint, and sets up what he denominates 'a further separate and distinct defense and as a counterclaim thereto,' a group of facts which show that he was employed by the Westchester County Water Works Company all through the long litigation, and it will be assumed for the purposes of this discussion that these services resulted in securing to the plaintiff in this action, as trustee, a larger fund than would have otherwise been secured. The answer demands judgment in harmony with the allegations of his counterclaim, upon the theory that having been of service in securing a larger award than would otherwise have been secured, he is entitled to compensation out of the fund for such services. Upon the trial of the action the learned court found that, although the appellant had rendered valuable services to the Westchester County Water Works Company in the condemnation proceedings, he 'was not retained or employed by the plaintiff herein as trustee under said mortgage above referred to, and did not render any services to it as its attorney or legal

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counsel in said proceeding; ' and as a conclusion of law, that he was not entitled to any lien upon the award made in the condemnation proceedings. Exceptions were taken to this conclusion, and ...


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