Case Name: In the Matter of the Liquidation of National Mortgage Corporation. In the Matter of the Plan for the Readjustment, Modification or Reorganization of the Rights of All the Holders of Investments in a Certain Bond and Mortgage Guaranteed by National Mortgage Corporation, Designated as Mortgage No. J-2 of that Company, and Covering Premises Known as #1601-5 Atlantic Avenue, Atlantic City, New Jersey
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1939-09-25
Citations: 172 Misc. 419
Docket Number: 
Parties: In the Matter of the Liquidation of National Mortgage Corporation. In the Matter of the Plan for the Readjustment, Modification or Reorganization of the Rights of All the Holders of Investments in a Certain Bond and Mortgage Guaranteed by National Mortgage Corporation, Designated as Mortgage No. J-2 of that Company, and Covering Premises Known as #1601-5 Atlantic Avenue, Atlantic City, New Jersey.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 172
Pages: 419–420

Head Matter:
In the Matter of the Liquidation of National Mortgage Corporation. In the Matter of the Plan for the Readjustment, Modification or Reorganization of the Rights of All the Holders of Investments in a Certain Bond and Mortgage Guaranteed by National Mortgage Corporation, Designated as Mortgage No. J-2 of that Company, and Covering Premises Known as #1601-5 Atlantic Avenue, Atlantic City, New Jersey.
Supreme Court, Additional Special Term, New York County,
September 25, 1939.
Harold H. Kissam, for the petitioner.
William, A. Shea, for the Superintendent of Insurance of the State of New York, opposed.
Davis, Polk, Wardwell, Gardiner & Reed, for the trustees of Series JL-1, opposed.
Wagner, Quillinan & Rifkind, for the trustee of Series NM, opposed. _ p_j , [

Opinion:
Frankenthaler, J.
In the court's opinion the provision of subdivision 5 of section 425 of the Insurance Law authorizing a secured creditor to surrender his security, in order to have his claim allowed without deduction of the value of the security, does not contemplate the surrender of the security after the expiration of the time to file claims. Otherwise, a claimant could speculate with the security, at the expense of the estate in liquidation, for an indefinite period of time after the final date fixed for the filing of claims and, if the results proved unsatisfactory, then surrender the security and have his claim allowed in full. The motion to authorize a surrender to the Superintendent of Insurance is accordingly denied.