Deschenes v. Tallman

Citation161 N.E. 321,248 N.Y. 33
PartiesDESCHENES et al. v. TALLMAN et al.
Decision Date01 May 1928
CourtNew York Court of Appeals

OPINION TEXT STARTS HERE

Action by Louis Deschenes and another against Francis J. N. Tallman and others. From an order (222 App. Div. 761, 225 N. Y. S. 815) denying the plaintiff's motion for a judgment on the pleadings, the plaintiff appeals by permission and the Appellate Division certifies question.

Reversed with directions, and questions answered.

See, also, 222 App. Div. 813, 226 N. Y. S. 799.

The Appellate Division certified the following questions:

‘I. Does the answer, read together with the stipulations as to the laws of Canada, state facts sufficient in law to constitute a defense or counterclaim?

‘II. Was the deed of the liquidators of Miller & Lockwell, Limited, valid to pass title to the real property in controversy and located in this state and recorded in its name?

‘III. Was the subsequent deed of the corporation sufficient to pass title to said real property?

‘IV. Should the order of Special Term, dated May 18, 1927, have been reversed, and should the motion for judgment on the pleadings and the stipulations as to the laws of Canada have been granted?

‘V. Were both of the above deeds, considered together, sufficient to pass title to said real property?’

Appeal from Supreme Court, Appellate Division, Second Department.

Raphael H. Weissman and Sarah Schreiber, for appellants.

Edward J. O'Toole, of Brooklyn, for respondents.

CARDOZO, C. J.

The complaint is for the foreclosure of a purchase-money mortgage. The answer is a counterclaim for breach of a covenant of seizin. Whether seizin was lacking is the question to be answered.

Plaintiffs sold the land to the defendant Francis Tallman in April, 1925. A predecessor in title was Miller & Lockwell, Limited, a Canadian corporation. By a decree of the courts of the province of Quebec, made in 1911, the corporation was adjudged insolvent, and its property, real and personal, was ordered to be sold by two liquidators duly appointed according to the laws of the province. The liquidators conveyed the land to the plaintiffs, who thereafter sold to Tallman with covenant of seizin. The land is located in the city of New York. The defendants insist that title does not pass under a deed by foreign liquidators.

A second and confirmatory deed, made in December, 1926, is also the subject of attack. After the sale to Tallman, the plaintiffs procured the execution of a quitclaim deed by the Canadian corporation. This deed, made by the corporation to the defendant Francis Tallman,contains a recital that it is given ‘in confirmation of a deed’ made by the liquidators; ‘it being the opinion of the liquidators that this deed is necessary for the beneficial winding up of the party of the first part and they having requested the execution of the same.’ The statutes of Canada are to the effect that the corporate life survives the appointment of a liquidator until the winding up is finished, but that the powers of the directors cease ‘except in so far as the court or liquidator sanctions the continuance of the same.’ The defendants insist that the later deed, being made under compulsion, adds nothing to the first one and leaves the title where it was.

The answer demands judgment for the cancellation of the purchase-money mortgage, the return of the cash payment, and reimbursement for the value of subsequent improvements.

We think the counterclaim must fail.

There is no need to determine what effect would be given to the liquidators' deed considered by itself. If they were chancery receivers (Sterrett v. Second Nat. Bank of Cincinnati, Ohio, 248 U. S. 73, 39 S. Ct. 27, 63 L. Ed. 135;Keatley v. Furey, 226 U. S. 399, 33 S. Ct. 121, 57 L. Ed. 273;Lion Bonding & Surety Co. v. Karatz, 262 U. S. 77, 87, 88, 43 S. Ct. 480, 67 L. Ed. 871;Mabon v. Ongley Electric Co., 156 N. Y. 196, 50 N. E. 805;Decker v. Gardner, 124 N. Y. 334, 26 N. E. 814,11 L. R. A. 480), or receivers or assignees in insolvency or bankruptcy (Security Trust Co. v. Dodd, 173 U. S. 624, at p. 629,19 S. Ct. 545, 43 L. Ed. 835;Osborn v. Adams, 18 Pick. [Mass.] 245; Callender v. Colonial Secretary, [1891] A. C. 460; Dicey, Conflict of Laws, p. 331), their deed would be a nullity. They would not gain a title to land within this state by force of their appointment in a foreign jurisdiction, and, not having it themselves, could not transmit it to another. If they were the universal successors of the corporation (Keatley v. Furey, supra, at pp. 403, 404, 33 S. Ct. 121, 57 L. Ed. 273;Chipman v. Manufacturers' Nat. Bank, 156 Mass. 147, 149, 30 N. E. 610), the representatives in dissolution proceedings of its personality and powers, a different consequence would follow (Martyne v. American Union Fire Ins. Co. of Philadelphia, 216 N. Y. 183, 110 N. E. 502;Relfe v. Rundle, 103 U. S. 222, 26 L. Ed. 337). The character and purpose of the proceedings in the courts of Canada are exhibited too imperfectly to enable us to judge with certainty of the origin and measure of the liquidators' powers. We leave the question open till decision becomes necessary.

[1][2][3][4] If the deed by the liquidators be assumed to be inoperative, there was none the less a conveyance of title upon delivery by the corporation of a confirmatory deed of grant. A judgment of a foreign court will not avail, of its own force, to transfer the title to land located in this state. It will not avail though a conveyance be executed by the sheriff or a master or other agent of the court in fulfillment of its mandate. Fall v. Eastin, 215 U. S. 1, 11, 30 S. Ct. 5, 54 L. Ed. 65, 23 L. R. A. (N. S.) 924, 17 Ann. Cas. 853;Carpenter v. Strange, 141 U. S. 87, 105, 11 S. Ct. 960, 35 L. Ed. 640;Watts v. Waddle, 6 Pet. (U. S.) 389, 8 L. Ed. 437. ‘The court not having jurisdiction of the res cannot affect it by its decree nor by a deed made by a master in accordance with the decree.’ Fall v. Eastin, supra. But the rule is different where the conveyance is executed by the owner, though he act under compulsion. Fall v. Eastin, supra, at p. 11, 30 S. Ct. 3, 54 L. Ed. 65, 23 L. R. A. (N. S.) 924, 17 Ann. Cas. 853;Watkins v. Holman, 16 Pet. (U. S.) 25, 57, 10 L. Ed. 873;Corbett v. Nutt, 10 Wall. (U. S.) 464, 475, 19 L. Ed. 976;Gardner v. Ogden, 22 N. Y. 327, 78 Am. Dec. 192. The conveyance, and not the judgment, is then the source of title. As to this the law has been undoubted since Penn v. Lord Baltimore (1 Ves. Sr. 444). The distinction is between a judgment directed against the res itself, and one directed against the person of the owner, who acts upon the res. His deed transmits the title irrespective of the pressure exerted on his will.

A different question would be here if we were required to determine whether the title would prevail against the remedies of creditors. Cf. Huntington v. Chesapeake, O. & S. W. Ry. Co. (C. C. A.) 98 F. 459, 464;Osborn v. Adams, 18 Pick. (Mass.) 245. A title acquired in foreign insolvency proceedings is subordinated to local creditors with executions or attachments against the goods and chattels of a debtor. Security Trust Co. v. Dodd, supra; Barth v. Backus, 140 N. Y. 230, 35 N. E. 425, 23 L. R. A. 47, 37 Am. St. Rep. 545; Vanderpoel v. Gorman, 140 N. Y. 563, 35 N. E. 932, 24 L. R. A. 548, 37 Am. St. Rep. 601; Willitts v. Waite, 25 N. Y. 577, 582;Blake v. Williams, 6 Pick. (Mass.) 286, 17 Am. Dec. 372;Disconto Gesellschaft v. Umbreit, 208 U. S. 570, 579, 580, 28 S. Ct. 337, 52 L. Ed. 625. Authority is not lacking that it is so...

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