Court Opinion

ID: 3605719
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:51:15.069957+00
Date Added: 2024-06-11T13:59:25.456909
License: Public Domain

The moneys of the Northern Insurance Company, to which the United States of America asserts a claim, are in the custody of the Supreme Court of the State of New York, and are held by the defendant as "agent or depository." (United States v.President  Directors of Manhattan Co., 296 U.S. 463.)
The moneys of the insurance company were placed in the custody of the court before the Soviet government was recognized, and while this State refused to give effect to decrees of the Russian government confiscating the property of the insurance company. Since recognition of the Soviet government by the United States, the courts of this State are bound to give effect to those decrees, and the United States of America, as assignee of the Soviet government, now has succeeded to any rights which, but for such decree, the insurance company would have. (United States
v. Belmont, 301 U.S. 324.)
Claiming ownership of the moneys now in the custody of the Supreme Court, the United States of America began a proceeding in the Federal court to compel payment to it. The Supreme Court of the United States held that it could not maintain that action. For moneys in the custody of the Supreme Court of this State, the plaintiff must resort to that court. (United States v.President  Directors of Manhattan Co., supra.) Proceedings are pending in that court for the distribution of these moneys. Claims have been presented. The defendant trust company has filed an accounting, and a referee has been appointed to pass upon the accounts and to determine the validity of the claims. The United States of America made a motion to intervene in those proceedings. Its motion was denied, and it was relegated to this action in equity for the assertion of its claim to the moneys.
There can be no doubt that in some form the United States of America must be given opportunity to assert its claim, and that the only question that remains open after the decision in theBelmont case is whether its claim *Page 411 
to the moneys of the insurance company is superior to the claims of others which have been filed in the accounting proceedings in the Supreme Court. The difficulty is that by denial of the motion to intervene, the United States of America cannot appear in those proceedings to contest the validity of the claims, and, on the other hand, the claimants cannot assert their claims in this action unless they are made or become parties to it. The purpose of the equity action is to obtain the moneys from the defendant bank. The defendant bank is an officer of the court. The bank must hold the moneys awaiting the further order of the court. That further order can be properly made only in accounting proceedings, or other proceedings in which both the defendant and all claimants can be heard. For that reason it seems clear to me that the motion of the United States to intervene should have been granted. I do not think that because the Supreme Court of the State of New York, at Special Term, erred in denying the motion for leave to intervene such error lays the basis for an action in equity against an officer of the court to compel him to deliver property in his custody. I suggest that for this reason the judgment of the courts below dismissing the equitable action should be affirmed, pointing out at the same time that the United States has an absolute right to intervene in the pending accounting proceeding of the custodian, and that a renewed motion for such relief should be granted.
CRANE, Ch. J., O'BRIEN, HUBBS, LOUGHRAN and FINCH, JJ., concur with RIPPEY, J.; LEHMAN, J., dissents, in opinion.
Judgment accordingly. *Page 412