Case Name: George F. Weaver Sons Company, Appellant, v. Frank Burgess, Respondent, et al., Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1959-02-05
Citations: 7 A.D.2d 238
Docket Number: 
Parties: George F. Weaver Sons Company, Appellant, v. Frank Burgess, Respondent, et al., Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 7
Pages: 238–244

Head Matter:
George F. Weaver Sons Company, Appellant, v. Frank Burgess, Respondent, et al., Defendant.
Fourth Department,
February 5, 1959.
Foley, Callanen S Foley (Arthur J. Foley, Jr., of counsel), for appellant.
Evans, Pirnie $ Burdick (Leonard W. Burdick of counsel), for respondent.

Opinion:
Per Curiam.
On July 17,1941, the plaintiff filed a petition as a debtor in a chapter 10 reorganization proceeding (U. S. Code, tit. 11, ch. 10) in the United States District Court. The District Court issued an order enjoining and restraining all persons claiming any right or lien in' or to the debtor's property from enforcing their liens. A copy of the petition and order was served upon the City of Utica on July 21, 1941. The City of Utica, in 1942 and 1943, commenced in rem foreclosure actions against the property in controversy, pursuant to title 3 of article VTI-A of the New York Tax Law, without having obtained from the District Court any consent to the bringing of these actions. Default judgments were entered in the foreclosure proceedings 'and tax deeds were issued to the city and thereafter, on September 13, 1944, the city conveyed the prop erty to the defendant Burgess, by a deed which was recorded on February 1, 1945.
The chapter 10 reorganization proceedings were terminated by order of the District Court on January 12,1952. The present action was commenced on July 16, 1956, to cancel and declare void the deeds to the city and from the city to Burgess as clouds upon the plaintiff's title. We are all in agreement that the foreclosure proceedings were void and that the deeds were invalid at the time that they were delivered because of the failure of the city to obtain the consent of the Federal court to the bringing of the foreclosure proceedings. The property was in the exclusive custody of the Federal court and no proceeding affecting the title thereto could be maintained in any other court without the consent of the Federal court (Isaacs v. Hobbs Tie & Timber Co., 282 U. S. 734; Dayton v. Pueblo County, 241 U. S. 588). It is clear from the cases cited and from the legion of cases following them that the New York courts had no jurisdiction to entertain the foreclosure proceeding and that the judgment and the deeds delivered pursuant thereto were wholly void for want of jurisdiction.
It was nevertheless held by the court below that the present action was barred under subdivision 7 of section 165-h of the Tax Law by reason of the fact that more than two years had elapsed from the date of the recording of the deeds and more than six months had elapsed from the date of the effectiveness of the statute. The court accordingly dismissed the complaint upon a motion under rule 107 of the Rules of Civil Practice.
Subdivision 7 of section 165-h was added by chapter 743 of the Laws of 1948 and went into effect April 3, 1948 and reads as follows: " Every deed given pursuant to the provisions of this section shall be presumptive evidence that the action and all proceedings therein and all proceedings prior thereto from and including the assessment of the lands affected and all notices required by law were regular and in accordance with all provisions of law relating thereto: After two years from the date of the record of such deed, the presumption shall be conclusive, unless at the time that this subdivision takes1 effect the two-year period since the record of the deed has expired or less than six months of such period of two years remains unexpired, in which case the presumption shall become conclusive six months after this subdivision takes effect. No action to set aside such deed may be maintained unless the action is commenced and a notice of pendency of the action is filed in the office of the proper county clerk prior to the time that the presumption becomes conclusive as aforesaid."
We are of the opinion that the motion to dismiss should have been denied. Subdivision 7 of section 165-h is applicable only to defects, including jurisdictional defects, in the course of the foreclosure action or proceeding. It has no bearing upon an action or proceeding which was void from the beginning, which the city had no right to institute in the first place and which the State courts had no jurisdiction to entertain. (Cameron Estates v. Deering, 308 N. Y. 24.) Town of Somers v. Covey (2 N Y 2d 250) does not hold anything to the contrary.
The complaint alleges that the plaintiff is still in possession of the property. If this is true, no Statute of Limitations is applicable to the action by the plaintiff to determine its title and to clear the void deeds from the record as clouds upon its title (Cameron Estates v. Deering, supra; Ford v. Clendenin, 215 N. Y. 10; Gifford v. Whittemore, 4 A D 2d 379, 385-386). On the other hand, if it appears upon the trial that the defendants had taken possession of the property at some time prior to the commencement of this action, the 10-year or 15-year Statute of Limitations may have begun to run. The defendants will have an opportunity to plead the Statute of Limitations in their answer.
The order appealed from should be reversed and the motion to dismiss the complaint denied.