In re the Rehabilitation of Lawyers Title & Guaranty Co.

162 Misc. 486 | N.Y. Sup. Ct. | 1936

Frankenthaler, J.

The court’s holding that the certificate holders possessed an equitable lien upon the title company’s undivided interest in the bond and mortgage for rents wrongfully recouped was not based upon the theory of tracing trust funds but, as stated in the opinion (157 Misc. 516), upon the principle that a tenant in common has an equitable lien upon rents collected by a cotenant for the portion wrongfully withheld by the latter. This lien should include interest on moneys improperly retained. However, interest should run only up to the date of the order of rehabilitation except that a proportionate part of any interest which was actually received thereafter by the Superintendent of Insurance should go to the certificate holders, the proportion being determined by the ratio of the improper recoupments to the total amount of the company’s share in the mortgage. The motion is granted to the extent indicated. Settle order.