United States Trust Co. v. Stanton

Andrews, Ch. J. The United States Trust Company, as substituted trustee under the last will and testament of Gilbert W. Bowne, deceased, brought this action to foreclose a mortgage executed to the original executors and trustees by the defendant Stanton. Among other defenses Stanton set up a counterclaim for services as attorney rendered on the retainer of the original executors and trustees in divers suits and proceedings in the business of the estate, all of which services were rendered prior to the substitution of the plaintiff. The trial court found the rendition of the services and their value, and that the bond and mortgage had been fully paid thereby. But the court refused to render judgment for the balance of the counterclaim against the plaintiff, as demanded by the defendant. The decision was clearly right. The plaintiff had entered into no contract with Stanton. The alleged services were rendered under a contract with its predecessor in the trust. That contract bound the former trustees individually and though the services were rendered for the benefit of the trust estate they were not rendered under such circumstances, so far as appears, as to create a charge thereon, which could be enforced by Stanton. (Austin v. Munro, 47 N. Y. 360; New v. Nicoll, 73 id. 127.) The plaintiff, when it succeeded to the trust, did not assume any obligation created by any contract between the former trustees and Stanton, and none was imposed by law. If any equitable ground exists for charging the trust estate for the value of the services rendered by Stanton, no such ground appears in the record, and assuming it to exist, it would furnish no reason for charging the plaintiff personally Avitli the debt, Avliich is AAdiat the defendant Stanton sought to do in demanding an affirmative judgment against the plaintiff for the excess of the counterclaim over and above the amount applied in satisfaction of the mortgage. *534 The case of Davis v. Stover (58 N. Y. 473), is not an authority for the contention of the defendant. In that case a defendant was permitted to set off against a debt owing by him to the insolvent bank the value of services rendered on the employment of the receiver, which the receiver might properly have paid out of the trust estate. Nor does the Statute of Counterclaim permit an affirmative judgment for the excess in a case like this. The plaintiff is a trustee and sues as such, and by sub. 3 of sec. 502 of the Code a demand against the plaintiff personally cannot be set up as a counterclaim, and by the same section only so much of a demand existing against the person whom the plaintiff represents or for whose beneiit the action is brought, as will satisfy the plaintiff’s demand, can be allowed as a counterclaim. The question as to the correctness of the judgment, so far as it applied so much of the value of the services as was necessary in satisfaction of the mortgage, is not involved. We think the part of the, judgment from which an appeal was taken, denying the right of the defendant Stanton to a judgment against the plaintiff personally for the excess, was right, and it should, therefore, be affirmed. All concur. Judgment affirmed.