Goeller v. Patrella

—In a proceeding, inter alla, to discharge a mortgage held by the defendants Home Credit Corp. and Home Loan and Investment Bank, FSB, on certain real property owned by a testamentary trust, Home Credit Corp. and Home Loan and Investment Bank, FSB, appeal from a decree of the Surrogate’s Court, 478 Nassau County (Radigan, S.), dated October 21, 1998, which, after a hearing, granted the petition and permanently enjoined them from foreclosing on the mortgage and/or collecting on the note against the trust. Ordered that the decree is affirmed, with costs. It was the duty of the appellants to inquire as to whether the proceeds obtained through the use of a trust asset were to be used for the ultimate benefit of the trust (see, Dye v Lewis, 40 AD2d 582, affd sub nom. Dye v Lincoln Rochester Trust Co., 31 NY2d 1012). Since the appellants had reason to know that the conveyance was made in contravention of the trust, the transaction is void (see, EPTL 7-2.4; see also, National Sur. Co. v Manhattan Mtge. Co., 185 App Div 733, 736-737, affd 230 NY 545; Boskowitz v Held, 15 App Div 306, 310-311, affd 153 NY 666). The appellants’ remaining contentions are either without merit or are not properly before this Court as they are raised for the first time on appeal (see, Green Point Sav. Bank v Oppenheim, 217 AD2d 571). O’Brien, J. P., S. Miller, McGinity and Smith, JJ., concur.