Court Opinion

ID: 3614189
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:57:42.036731+00
Date Added: 2024-06-11T14:24:29.277339
License: Public Domain

The purchaser at a sale under judgment of foreclosure of a tax lien has rejected title on the ground that the title is defective. The only alleged defect which requires discussion arises from the fact that at the time of the foreclosure action Model Building and Loan Association of Mott Haven was the owner of record of a mortgage upon the premises, and, it is said, was not named as a party defendant in the foreclosure proceedings. We are agreed, I think, that the other alleged defects are without substance.
In 1917, long prior to the foreclosure proceedings, the Superintendent of Banks had taken possession of the property and business of Model Building and Loan Association for the purpose of liquidation. A final dividend was paid in the liquidation proceedings in 1923. The foreclosure action was begun in 1931. "Joseph A. Broderick, Superintendent of Banks of the State of New York, in charge of the Model Building and Loan Association of Mott Haven in liquidation," was named as a party defendant. It may be conceded that Model Building and Loan Association was not finally divested of its property when it was taken over by the Superintendent of Banks. None the less, the Superintendent of Banks has the same powers as a receiver over the property of the corporation. He may even convey title to its property. (Banking Law [Cons. Laws, ch. 2], § 69.) He may in the name of the corporation "prosecute and defend any and all actions and legal proceedings" (§ 71). He had supervision of its affairs. The ordinary functions of the managers of the corporation were suspended and the liquidator in the meanwhile acted in their stead. *Page 330 
(Lafayette Trust Co. v. Beggs, 213 N.Y. 280; Isaac v.Marcus, 258 N.Y. 257.)
There is no evidence that the Model Building and Loan Association has ever been permitted to resume business, and there is no claim that the Superintendent of Banks ever relinquished his right as liquidator to its property. If the corporation had been specifically named as a party defendant, the Superintendent of Banks would have been called upon to decide whether or not to defend the action. No other representative of the corporation would have had such power or duty. Again, the Superintendent of Banks as the officer in charge of the corporation would have been the proper person upon whom service should be made. He was given the required notice and opportunity to defend the action. Defense to the action by him, if successful, would have inured to the benefit of the corporation.
The form of description of the corporation as party defendant is immaterial if, in fact, it was by due notice made a party to the action. It was, perhaps, necessary in the foreclosure action to name the corporation as defendant, for suits by or against it must, in accordance with the statute, be prosecuted or defended in its name. Its corporate functions were at that time suspended, its property was in "custodia legis" and the custodian and the public officer who could act in its behalf was named as the party "in charge of the Model Building and Loan Association of Mott Haven in liquidation." Differentiation between the custodian of property and its owner is proper and carries legal consequences when each has separate functions and separate rights. It is immaterial when functions and rights are merged in the custodian. That is true here, where, so far as appears, possession of the property had not been relinquished by the Superintendent, and he had not been discharged of his duty and function to prosecute and defend actions in its name. The objection that the corporation should have been named as *Page 331 
party defendant, separately from the public officer who was properly described as in charge of the corporation, rests in formalism, long outlived by the law. The essential requirement to bring a defendant into court is that the defendant be named or described in such form as will properly identify the defendant and give notice of opportunity to defend. That has been done here. It has been done here in manner appropriate to secure that purpose. The judgment of foreclosure is binding upon the corporation, since the officer charged with the duty of defending suits against it has failed to present any defense.
The order should be affirmed, with costs.