Pitcher v. Carter. brick stores; which mortgage was duly assigned on the 23rd of December, 1842, to John Howland. The latter was a party to this suit, and his lien was admitted. Thomas Carter died in September, 1832, leaving three infant children, Wellington A., Thomas J., and Cornelia M. In July 1834, his widow, married Antoine Artois, who, before that event, ratified the deed of trust to Sniffen, and agreed that Mrs. Carter should continue to receive the net rents, and dispose of them in the same manner as if she were sole. On the 12th of January, 1835, on the petition of Artois and wife, Augustus W. Clason, the brother of the latter, was appointed trustee, by an order of this court, in the place of Sniffen, upon his executing a bond under the direction of a master; which bond was executed accordingly, and Sniffen conveyed the premises to Clason, in trust, pursuant to the order. On the 18th of February, 1835, on the petition of Artois and wife and A. W. Clason, the latter acting as trustee, and as the next friend of the infant children of Carter, and on the report of a master, the Vice-Chancellor made an order authorizing Clason to take down the old buildings on the lot 52 Water street, and to erect a large and valuable store thereon, and for that purpose to raise $6500 by a mortgage on the lot, in which Artois and wife were to join, and which was to be a lien on all the rights and interests of the infants, as well as of those parties and the trustee. The order also provided that the trustee should apply $1000 of the rents every year to the reduction of the principal and interest of the mortgage debt thereby created. The $6500 was borrowed by Clason from The Firemens Insurance Company, and the mortgage directed by the order, was executed to that Company. The trustee in the summer of 1835, erected a new store on 52 Water street, which cost about $7600. In the GREAT FIRE of December 16 and 17, 1835, the store 52 Water street and the two stores 84 Pearl street, were entirely destroyed. At that time, they were all insured in the Firemens Insurance Company, the Pearl street stores for $7000 and the Water street store for $5000; but the Company was rendered bankrupt by the fire, and it was for several months entirely uncertain what part of the loss it would probably be able to pay. Pitcher v. Carter. One of the stores constituting lot 84 Pearl street, was then occupied by Henry I. Seaman, under a lease to him and John Van Wyck, executed January 18, 1832, by Carter and his wife, for a term of ten years from May 1st, 1832, at the annual rent of $1500, after the 1st of January, 1833. The lease contained a covenant on the part of the lessees, to pay all taxes and assessments, and to make all necessary and proper repairs for maintaining and upholding the premises during the term, at their own costs and charges, and to yield up the same at the end of the term, in as good state as reasonable use and wear thereof would permit, damages by the elements excepted. This lease was recorded on the 20th January, 1832. The other store on lot 84 Pearl street, at the time of the great fire, was occupied by James M. Goold, under a precisely similar lease for ten years from the first day of January, 1832, at the annual rent of $1500 after January 1, 1833, executed by Carter and wife to Goold and Abraham S. Mesier. This lease was acknowledged on the day of its date, but was not recorded. The rents under these leases, were collected by Clason, as trustee, until the great fire; after which the lessees refused to pay, and denied their liability to pay rent thereafter. The lessees were at that time in good standing and abundantly able to pay the rent reserved. On the 12th day of January 1836, Clason as trustee, and in behalf of the three infants as their next friend, united with Mrs. Artois in a petition to the Vice-Chancellor, which set forth all the foregoing facts, except those in reference to the leases, and the occupation of the premises and the payment of the rent under the same. No mention of the leases was made, but the petition stated that by the destruction of the buildings by fire, Mrs. Artois was utterly deprived of any revenue from the premises for the support of herself and her family, and that the premises were then utterly unproductive; and unless some disposition were made of them to make them produce an income, they would be liable to be sold for taxes and assessments; and that such disposition of the premises was necessary and proper for the support and maintenance of Mrs. Artois and her infant children and the education of the latter. The petitioners also Pitcher v. Carter. set forth that the interests of all the parties interested in the premises in Pearl and Water streets, would be substantially promoted by raising on mortgage of the same, a sum sufficient to cancel the liens thereon, and to rebuild the same with three stores; which stores they believed would rent for $7000, annually. That $30,000 would be requisite to pay off those liens and erect the stores, and the petition proposed that $1500 per annum should be applied to the extinguishment of the mortgage to be given, and that the moneys which should be recovered on the insurance of the burnt stores, should be applied in the same manner. The petition thereupon prayed for an order permitting them to mortgage the premises accordingly, and that a guardian should be appointed for the infants, to join in the execution of the mortgage. On this petition an order was made, referring it to a master, to ascertain the facts and report thereon, with his opinion as to the execution of such mortgage and its proper terms and limitations. The master, on the 23rd of April, 1836, reported upon the petition. He stated that the material allegations contained in it were true, and he founded his opinion upon the assumption that the premises were wholly unproductive, and in their then condition would yield no revenue, and were moreover threatened with assessments, for opening and regulating streets in their vicinity. It does not appear that the master had any information of the existence of the leases held by Seaman and Goold. He set forth a description of the three stores which should be erected on the lots, and estimated the cost of completing the same at $26,000. That there was due to Mr. Roosevelt on his mortgage $6620 25, and on the mortgage to the Insurance Company $6738 37; and the sum which would be recovered from the latter on the policies, was still indefinite. The master, therefore, recommended that $40,500 be raised on mortgage or mortgages of the premises to build the three stores and pay off those liens, and also to pay off $1085 89 due to the trustee for his advances. He reported that the income from the three stores, when finished, would be $7000 a year; and that besides paying the interest, $680 of the net income should be applied yearly to the principal of the mortgages; that being as much as the estate Pitcher v. Carter. could pay, after giving to Mrs. Artois the same income that she received before the great fire. Mrs. Artois and her husband consented before the master to such appropriation; and he reported to the court, that the interest of the infants would be promoted by the proposed erections and mortgaging the premises. Upon the coming in of this report, the Vice-Chancellor, on the 23rd of May, 1836, made an order that the petitioner Clason, and the infants, should have leave to raise money upon the premises, 52 Water street and 84 Pearl street, by mortgage or mortgages, as might be deemed most beneficial for the estate, not exceeding in the whole $40,500; and that the trustee should pay the principal of the same, out of the rents, $680 yearly, or should each year place that amount in the New York Life Insurance and Trust Company to accumulate for that purpose. The order directed the mortgage or mortgages to be executed by Artois and wife, by Clason as trustee, and also by Clason on behalf of the infants, and that the same should bind and be an incumbrance upon the several estates which those parties had in and to the premises; that the sum of money so to be raised should be received by Clason, on his giving a bond for the faithful performance of his trust in respect of the same, to be settled and approved by a master; that the money so to be raised should be expended by Clason in the erection of the proposed buildings and for the expenses attending such erection, and to the cancelling of the existing claims against the premises; and that the surplus, if any, should be paid on the mortgage or mortgages so to be given. The order further directed the mortgage or mortgages to be executed under the direction of a master, and subject to his approval. On the 26th day of January, 1837, an agreement was executed between Clason, describing himself as trustee, &c., of Mrs. Artois of the first part, James M. Goold of the second part, and Henry I. Seaman of the third part. It recited Carter and wife's lease to Seaman & Van Wyck, and their lease to Goold and Mesier; the destruction of the premises 84 Pearl street, by fire during the continuance of those leases; that the title to the premises was vested in Clason as the trustee of Mrs. Artois, the interest in the first lease was vested in Seaman, and that in the Pitcher v. Carter. second lease in Goold; and that the parties had come to the conclusion of rebuilding the premises to the end, that the several lessees might occupy the same advantageously, to the close of their respective terms. The agreement then provided, that Seaman and Goold should rebuild the premises in the style and manner therein expressed, for $14,500, and would furnish all needful funds for that purpose:-That Clason should immediately after the execution of the agreement, execute and deliver to Seaman and Goold a mortgage on the building and premises, pursuant to the terms of the Vice-Chancellor's order, for $14,500, payable May 1, 1842, with interest semi-annually; the mortgage to remain in escrow, till Seaman and Goold should have expended the amount in rebuilding. That the leases should stand ratified and confirmed between the parties to the agreement, and in addition to the rent therein reserved, Seaman and Goold were each quarter to pay the interest on the mortgage of $14,500 during the unexpired terms; such rent and addition to commence May 1, 1837; and Seaman and Goold were respectively to pay their arrearages of rent up to November 1, 1836; but they were not to pay any rent between those dates, except the interest of the mortgage. And Seaman and Goold covenanted with Clason, to indemnify him against Mrs. Artois in respect of the rent so remitted. And that Clason as trustee should keep the building to be erected, fully insured; and in case of its being injured by fire, the insurance money should be applied to repairing or rebuilding the same for the use of Seaman and Goold. A mortgage was executed pursuant to this agreement, dated January 14, and acknowledged January 27, 1837, but not recorded till January 16, 1838, by which Artois and wife, Clason as trustee of Mrs. Artois, and Clason as the next friend of the infants, conveyed the premises 84 Pearl street, to Seaman and .Goold, to secure the re-payment of the $14,500 with interest semi-annually. The order of May 23, 1836, was set out at large in the mortgage, and the latter recited that Seaman and Goold had loaned and advanced to the parties of the first part, pursuant to the order, the sum of $14,500 for the rebuilding of |