Court Opinion

ID: 5337407
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:40:55.980175+00
Date Added: 2024-06-11T08:29:31.068398
License: Public Domain

Lewis, J.
(dissenting). The Schackno Act (Laws of 1933, chap. 745) is one of a number of measures prompted by the existing emergency in economic conditions. One of its purposes was to set up an authority by which the assets of a mortgage guaranty corporation could be conserved and administered under government supervision until the causes necessitating such action have been removed. Among those whose rights are sought to be protected by the statute are the holders of certificates of interest in guaranteed mortgages.
From the record before us it appears that the Superintendent of Insurance, acting as a rehabilitator under the statute, has been placed in charge of the affairs of the Title and Mortgage Guarantee Company of Buffalo. He has conserved its assets and administered its affairs in the interest of the owners of its mortgage investments and is now in court, upon an application by certain trustee holders of a certificate who have given due notice of their demand for payment thereof and who seek an order declaring them to be entitled to payment prior to the payment of any other certificates on which demand was made subsequent to their own or on which no demand whatever has been made.
I am not in accord with the decision about to be made which I believe transcends the authority given. by the Schackno Act and impairs a clear contractual obligation between all certificate holders, viz., that, after three years from their date, all certificates shall be payable in the order in which notices requiring their payment shall be received and registered by the company.
Proper deference to the ruling by the Court of Appeals in Matter of People (Title & Mortgage Guarantee Co.) (264 N. Y. 69) leads to the conclusion that the acts of the Superintendent of Insurance in taking over the affairs of the company involved in this proceeding were legal even though, in a strict sense, they may have impaired the contractual relations of each certificate holder. However, I do not interpret that decision as having determined the question now before us, for the opinion states (p. 80): “ Upon this appeal ‘ only the constitutional question shall be considered and determined by the court.’ ”
Admitting that the Superintendent of Insurance was authorized to take over the affairs of the corporation and assuming he has conserved its assets and administered its affairs in a manner to *233meet the design of the Schackno Act, I find no statute and no decision which authorizes the court, after the beneficial purposes of the act have been accomplished, to disregard or amend the plain provisions of each certificate wherein the holder thereof has agreed to a definite method of payment. Borrowing from language more convincing than my own, Matter of People (Title & Mortgage Guarantee Co.) (supra, at p. 92), “ the owner of a single certificate in a series has a contractual right to insist upon the enforcement of every contractual obligation in which he is interested and to refuse to accede to any impairment of such obligation by agreement.” The force of this statement is emphasized when applied to the proceeding before us where certificate holders are insisting upon the recognition by the court of a vested contractual right, at a time when the beneficent purposes of the Schackno Act have been accomplished, and the conserved assets of the corporation are to be distributed. I believe the effect of the ruling by a majority of the court is to disregard that vested right. Accordingly I dissent.
Order affirmed, without costs.