179 Misc. 42 | New York Court of Claims | 1942
This is a motion by the State to dismiss the claim upon the ground that it was not duly filed and that, therefore, this court does not have jurisdiction to hear and determine it.
For the solution of that question, it is necessary to set forth the facts alleged in the claim. The Title Guarantee & Trust Company sold participating certificates in a bond and mortgage in the sum of $1,500,000, dated July 25, 1928, and covering the Lido Club Hotel in Nassau county. Payment of the certificates was guaranteed by the Bond & Mortgage Guarantee Co. The bond, and mortgage were payable $100,000 a year on July first of each year from 1929 to 1932 and the balance of $1,100,000 was payable on July 1, 1933. The sum of $100,000 was paid upon the principal on or about July 1, 1929, and the balance of principal has since been in the sum of $1,400,000. It is further alleged that pursuant to chapter 19 of the Laws of 1935, the Mortgage Commission “acquired or claimed to have acquired a certain right, title and interest in and responsibilities as agent with respect to said bond and mortgage. Shortly thereafter said Mortgage Commission of the State of New York formed as a subsidiary, Mortgage Commission Servicing Corporation and deputed to said corporation certain duties with respect to the bonds and mortgages affected by said Mortgage Commission Act.”
Pursuant to chapter 944 of the Laws of 1939 and about September 30, 1939, the Mortgage Commission and the Mortgage Commission Servicing Corporation, were terminated, and their duties and responsibilities transferred to the superintendent of insurance. Claimants are chairman and treasurer, respectively, of a committee of certificate holders and authorized to act in their behalf. The claim further alleges that this claim is “for an accounting of the damages caused to claimants by reason of the breach of contractual duty as well as negligence, misfeasance and non-feasance in the performance of their duties as fiduciary for claimants on the part of Mortgage Commission of the State of New York and Mortgage Commission Servicing Corporation, a wholly owned subsidiary of said Mortgage Commission of the State of New York.”
The details of the claim are then stated and it is alleged that the acts out of which the claim arose, occurred between May 1, 1935, and May 18, 1939, and that the latter date was the date of accrual of the claim, when the property was sold, after foreclosure resulting in an indicated deficiency of about $1,550,000 for which amount an award is asked. A claim against the State
Claimants contend that they were entitled to such extension of time, based on the following facts, which are referred to in the claim. An action in the Supreme Court was commenced on or about September 15, 1939, by the service of a summons and complaint, which complaint alleged substantially the same cause of action as is contained in this claim. On motion of the State Mortgage Commission and the Mortgage Commission Servicing Corporation, the defendants therein, and both of which corporations appeared through the Superintendent of Insurance as their successor, Mr. Justice Pécora, sitting at Special Term, dismissed the complaint, holding that the Supreme Court had no jurisdiction of the action and that the defendants being agencies or instrumentalities of the State, the action against them is an action against the State and therefore, the Supreme Court did not have jurisdiction. He also held that the action was one in tort. (Beldon v. Mortgage Comm. of State of New York, 173 Misc. Rep. 731.) Upon appeal to the Appellate Division of the Supreme Court, First Department, this decision was reversed by a divided court. (Breen v. Mortgage Comm. of State of New York, 260 App. Div. 753.) The title of the action was different in the Appellate Division for the reason that there was a substitution for one plaintiff. The Appellate Division held that because the act which created the Commission pro
It is unnecessary to decide at this time whether section 23 of the Civil Practice Act is generally applicable to proceedings in the Court of Claims, for the reason that such application does not exist in this particular case, because the State was not a defendant in the action in the Supreme Court. Said section 23 of the Civil Practice Act, does not extend the time and has no application unless the parties in the two actions are the same. (Streeter v. Graham & Norton Co., 263 N. Y. 39; Shaw v. Cock, 78 N. Y. 194; Davis v. Norfolk Southern R. R. Co., 200 N. C. 345; Murphy v. Board of Supervisors, 205 Iowa, 256.)
The Court of Appeals in holding that any judgment recovered in the action above referred to, would be against the State, did not mean that the State was a party to the action. It was held merely that any such judgment would be satisfied out of the funds of the Mortgage Commission, which funds were State moneys and that such funds can only be recovered in an action against the State pursuant to the Court of Claims Act. In Peck v. State (137 N. Y. 372) it was held that the board of managers of a State institution, while representing the State in making contracts, did not represent it in any suit brought against the board, either for misfeasance or nonfeasance in the discharge of the duties devolved upon them by law. In the opinion in that case, on page 375, it was said: “A state cannot be sued in its own courts, except by its consent; and this rule is founded upon public policy of great importance, and it would be greatly impaired, and could be largely nullified, if the state could be bound by judgments rendered against its agents or
The motion is granted and an order may be submitted accordingly.
