App. Div.] SECOND DEPARTMENT, MAY TERM, 1902. the animals to their barns and there to retain them, under the assertion of a lien, until they were redeemed or turned over to their owner according to law. On the same and the following days the plaintiff called upon the defendants and requested his horses, but it does not appear that he ever made a legal offer to redeem the property. On the thirteenth day of July the plaintiff brought an action in replevin to gain possession of the property thus detained, and after a trial in a Justice's Court judgment was rendered in favor of the plaintiff. Upon appeal to the County Court and a trial therein, judgment was again rendered in favor of the plaintiff. This court is now called upon to pass upon the appeal. In arriving at a conclusion we must take into account, chiefly, the statutes governing strays and the method of enforcing liens thereon, and, applying these requirements to the facts in this case, ascertain whether the defendants were or were not justified in detaining the animals in question until they were legally redeemed or otherwise disposed of. It is urged by the plaintiff that as inasmuch as one of the defendants told the plaintiff that he had telephoned to a justice of the peace and that the property would be disposed of according to law, the defendants are now, or were at the trial, precluded from defending their action in the premises on the basis of the Town Law. We do not think the mere fact that the defendants telephoned to a justice of the peace and made the remarks attributed to one of them. could in any way affect their legal rights or remedies. The Code (§ 3082 and subsequent sections) makes provision for actions against a person "who suffers or permits one or more cattle, horses," etc., "to run at large," and it is provided that when such animals are found running at large and are seized in the manner prescribed, the officer or person so seizing them "must immediately file, with a justice of the peace of the town in which the seizure was made, a written petition, verified by his oath," etc. (§ 3086.) This the defendants had not done before the replevin action was instituted by the plaintiff. The defendants contend that they were acting under the provisions of the Town Law (Laws of 1890, chap. 569, §§ 120, 121). Section 120 of the Town Law reads as follows: "Whenever any person SECOND DEPARTMENT, MAY TERM, 1902. [Vol. 72. shall have any strayed horses, cattle, sheep, swine or other beasts upon his inclosed land, or shall find any such beast on land owned or occupied by him doing damage, and such beast shall not have come upon such lands from adjoining lands, where they are lawfully kept, by reason of his refusal or neglect to make or maintain a division fence required of him by law, such person may have a lien upon such beasts for the damage sustained by reason of their so coming upon his lands and doing damage, for his reasonable charges for keeping them, and all fees and costs made thereon, and he may keep such beasts until such damages, charges, fees and costs are paid, or such lien is foreclosed, upon complying with the provisions of this article relating thereto." The further provisions of the Town Law relate to the manner of redeeming and disposing of strays in the possession of one upon whom they have trespassed. In this instance the plaintiff did not redeem his property, and acting under the provisions of the Town Law (§ 121) the defendants were required, if the animals were not redeemed within five days, to file their notice of lien. Before the expiration of the five days the plaintiff had instituted a replevin action. It is clear that the animals were on the property of the defendants, that they came from the highway and that they were doing damage when taken into custody by the defendants. If the Town Law is of any purpose or effect it must be to cover cases of this character. Its provisions are simple, and inasmuch as no question was raised upon the trial to the sufficiency of the defendants' answer, we can arrive at but one conclusion, and that is, that the contention of the defendants is justified and must be sustained. A careful reading of the Town Law, the Code provisions and the cases cited leads irresistibly to this conclusion. (See, also, Boyce v. Perry, 26 Misc. Rep. 355; Coles v. Burns, 21 Hun, 246; Rockwell v. Nearing, 35 N. Y. 302; Cook v. Gregg, 46 id. 439; Leavitt v. Thompson, 52 id. 62; Pierce v. Hosmer, 66 Barb. 345.) The judgment should be reversed. All concurred. Judgment of the Westchester County Court reversed and new trial ordered, costs to abide the event. App. Div.] ATLANTIC TRUST COMPANY, Trustee, Respondent, v. THE CRYSTAL WATER COMPANY OF EDGEWATER, Appellant, Impleaded with THE MERCANTILE TRUST COMPANY, Trustee, Defendant. Negotiable bonds secured by a trust mortgage are to be regarded as notes presumption as to consideration · ·burden of proof in the case of the original bondholders and of their transferees — assent of the stockholders to a mortgage — right of denial thereof by the corporation — option on default in interest to declare the principal due. Where a corporation issues a series of negotiable bonds secured by a trust mortgage, the holders of such bonds must, in an action brought to foreclose the mortgage, be regarded as if they were holders of negotiable promissory notes. As between the original bondholders and the corporation, the possession of the bonds is sufficient to raise the presumption that the holders have acquired them bona fide for full value and in due course, and if the corporation relies upon the defense that the original bondholders paid no consideration therefor it must introduce evidence rebutting the presumption. Where the trustee named in the mortgage is not a mere depositary of the bonds, but is a trustee for the bondholders, it may maintain an action to foreclose the mortgage. In such an action, when the trustee proves the issue of bonds and shows that it is the holder thereof, it is entitled to the presumption which would have obtained had the action been brought by the bondholders themselves. The trustee, if it wishes to avail itself of the superior equities which subsequent transferees of the bonds would have, must show that its cestuis que trustent are not the original bondholders. In the absence of such proof, the corporation is entitled to show that there was no consideration for the execution of the bonds. In determining whether a sufficient number of stockholders of the corporation assented to the execution of the mortgage as required by the statute, the amount of the stock actually issued and owned should be regarded as the amount of the capital stock. The corporation is estopped from attacking the validity of the mortgage on the ground that the necessary consents of the stockholders were not obtained, as long as it retains any property acquired under the mortgage. Quare, whether such defense would be available to the corporation under any circumstances. A provision in the mortgage that, in the event of a default continuing for ninety days in the payment of the interest due upon the bonds, the principal of the bonds shall, at the option of the holders of such bonds, become due and payable, does not require the exercise of the option by all of the bondholders; it is sufficient that the holders of a large majority of the bonds have elected to exercise the option. Quare, whether the option is one to be exercised by the trustee of the mortgage and not by the bondholders. SECOND DEPARTMENT, MAY TERM, 1902. [Vol. 72. APPEAL by the defendant, The Crystal Water Company of Edgewater, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Richmond on the 4th day of December, 1901, upon the decision of the court rendered after a trial at the Richmond Special Term. Howard Taylor, for the appellant. William N. Cohen [Bainbridge Colby with him on the brief], for the respondent. JENKS, J.: This is an action brought by the trustee to foreclose a mortgage made by the defendant corporation, The Crystal Water Company of Edgewater, to secure bonds for $750,000, payable to trustee or bearer on July 1, 1910. The defendant's answer is (1) that the bonds were given for no consideration or for such an inadequate consideration as amounted to bad faith; (2) that they were ultra vires the corporation; (3) that the mortgage lacked the statutory assent of the stockholders, and (4) that the principal of the mortgage had never become due. I consider the defenses in their order. 1. The learned counsel for the appellant stated on the argument that the first question involves the burden of proof. The last analysis may be so described. The bonds were negotiable instruments (McClelland v. Norfolk Southern R. R. Co., 110 N. Y. 469, 475, 476), and the holder thereof is regarded as is the holder of a bill or note of the same character. (Daniel Neg. Inst. [4th ed.] § 1502.) Upon the foreclosure of such a mortgage, as against bona fide purchasers for value, only the same defenses are permitted as might be raised in an action in a court of law upon the bonds, and the bondholders "stand in the same position as bona fide assignees for value and before maturity of negotiable promissory notes." (Jones Corp. Bonds & Mort. § 414, citing Kenicott v. Supervisors, 16 Wall. 452; Carpenter v. Longan, Id. 271.) If an action had been brought by the original bondholders, then as between them and the defendant, the possession of the bonds was sufficient to raise the presumption that attaches to the possession of a negotiable instrument, that the holder had acquired them bona fide, for full value, and in due course. (Kneeland v. Lawrence, 140 U. S. 209; Hotel Co. v. Wade, App.Div.] 97 id. 13, 24; Collins v. Gilbert, 94 id. 753; Newcombe v. Fox, 1 App. Div. 389; affd., 154 N. Y. 754.) The fact that the instrument is negotiable raised a presumption which stands in lieu of proof, and it then was incumbent upon the defendant to give evidence that there was no consideration paid by the original transferee of the bonds; that is, it must meet the presumption by evidence as if the plaintiff had proven that he had paid consideration. In Durland v. Durland (153 N. Y. 67), the court, per MARTIN, J., say: "Moreover, that the paper, which is the basis of this claim, is a promissory note and must be treated as such, there can be no doubt. A good consideration is not only stated on the face of the note, but the presumption is that it is a valid obligation, based upon a good and legal consideration, and the burden of showing that there was a want of consideration rested upon the defendant. The appellant, while admitting this presumption, contends that because the respondent introduced evidence to show an actual consideration, therefore she cannot avail herself of the presumption which the law affords. With this contention we do not agree. We think it cannot be properly held that the plaintiff, by giving evidence showing an actual consideration, thereby waived the right to avail herself of the presumption which the law affords or that it relieved the defendant from the burden of proving his defense." But the learned and able counsel for the appellant says that the plaintiff is a mere depositary so that in no part of the trial were the rights of any persons proven whereon could be founded a claim. If the plaintiff were a mere depositary, there is authority that it could not maintain this action. (Daniel Neg. Inst. [4th ed.] § 1181a; Sherwood v. Roys, 14 Pick. 172.) I think that the learned counsel is more accurate when he states, further on in his brief, that the plaintiff is a trustee for the bondholders. The bondholders are the beneficiaries of the mortgage and that instrument " contains, in effect, a contract made for their benefit through a trustee as a convenient intermediary." The rights vested in the trustee were for the benefit of the bondholders, who are the real parties in interest. (O'Beirne v: Allegheny & Kinzua R. R. Co., 151 N. Y. 372, 384; Ettlinger v. P. R. & C. Co., 142 id. 189, 193; Shaw v. Railroad Co., 100 U. S. 605; Hackensack Water Co. v. De Kay, 36 N. J. Eq. 548; Jones Corp. Bonds & Mort. § 294; Cook Corp. § 821; Taylor |