In re Holden

• Decision Date: 19 May 1936
• Citation: 271 N.Y. 212,2 N.E.2d 631
• Parties: In re HOLDEN et al.
• Court: New York Court of Appeals Court of Appeals

271 N.Y. 212

2 N.E.2d 631

In re HOLDEN et al.

Court of Appeals of New York.

May 19, 1936.

Proceedings on the petitions of Edgar Hamilton Holden and others for an order vacating, canceling, and setting aside the orders of the Supreme Court, Appellate Division, Second Department, made and entered on February 8, 1929, and on April 19, 1929, directing and authorizing the Chamberlain of the City of New York to pay to Barbara C. Nelson and to Augusta A. Higgins the awards under damage parcels Nos. 6 and 6-A in a certain proceeding in condemnation by the City of New York, and for other reliefs described in such petitions. From an order of the Appellate Division, Second Department (243 App.Div. 543, 275 N.Y.S. 867), which vacated and set aside previous orders made by it, canceled certain assignments and a tax certificate, and directing that the appellants deposit with the Chamberlain to the credit of the proceeding the moneys received by the appellants Augusta A. Higgins and Barbara C. Nelson as payment of the said awards, Theodore B. Hennenlotter and others, pursuant to leave granted by the Court of Appeals, appeal.

Order reversed, and proceedings dismissed.

LEHMAN and FINCH, JJ., dissenting. Appeal from Supreme Court Appellate Division, Second Department.

Matt Goldstein, of New York City, for appellants Theodore B. Hennenlotter, Augusta A. Higgins, and Barbara C. Nelson.

Herman S. Bachrach and Clarence G. Bachrach, both of Brooklyn, for appellant J. Charles Zimmerman.

Arthur M. Laufer, of New York City, for respondents.

HUBBS, Judge.

In 1927 the city of New York acquired title in condemnation of land as a school site. Awards were made on two damage parcels known as damage parcels Nos. 6 and 6-A. The sum awarded for those damage parcels was deposited with the city chamberlain pursuant to section 1439 of the Greater New York Charter (Laws 1901, c. 466, as added by Laws 1915, c. 596) to the credit of unknown owners. In January, 1929, Barbara C. Nelson commenced two separate proceedings in the Appellate Division, Second Department, for the collection of five-sixths of each award for the taking of damage parcels Nos. 6 and 6-A. Her petition alleged that she was the owner of a five-sixths interest in each award by virtue of assignments executed by heirs at law and next of kin of John Cullen, deceased, who was the owner of the property condemned. In that proceeding, testimony was taken by the corporation counsel, and thereafter two separate orders were made and entered by the Appellate Division, by the terms of which Barbara C. Nelson was granted five-sixths of the sum awarded for each of the damage parcels Nos. 6 and 6-A and the city chamberlain was directed to pay the same. The corporation counsel consented to the form and entry of each order. Thereafter the city chamberlain, after deducting taxes, assessments, etc., paid to her $2,398.29 on account of damage parcel No. 6 and $2,499.25 on account of damage parcel No. 6-A.

On February 25, 1929, Augusta A. Higgins, as assignee of one Burchard, commenced a proceeding in the Appellate Division based upon a tax certificate issued by the collector of assessments and arrears of the city of New York, entitling the owner to a lease of damage parcel 6-A for 10,000 years. At the time of the commencement of the proceeding, there was on deposit with the city chamberlain $656.29 to the credit of unknown owners of damage parcel 6-A. The matter was referred to an official referee, who, after a hearing, reported that the petitioner was entitled to payment of the sum of $656.29, the balance on deposit to the credit of unknown owners of parcel 6-A. The report of the referee was confirmed, and the city chamberlain paid the money to the petitioner.

In November, 1934, over five years later, the present proceeding was instituted by notice of motion praying for an order vacating and setting aside the assignments made to Barbara C. Nelson; vacating and setting aside the orders of the Appellate Division directing payment of the awards to Barbara C. Nelson; vacating and setting aside the order directing payment of $656.29 to Augusta A. Higgins; and vacating and declaring null and void the tax certificate issued to Augusta A. Higgins. Also for an order directing all of the appellants to deposit in court the amount collected by Barbara C. Nelson and Augusta A. Higgins, with interest. The relief prayed for was granted by the Appellate Division on the ground that Barbara C. Nelson's assignor had procured the assignments from the unknown owners by fraud and that Harry Holden, who had an interest in the balance of $656.29 on deposit to the credit of unknown owners of parcel 6-A, never received notice of the proceeding which resulted in an order directing that sum to be paid to Augusta A. Higgins. Also on the ground that the prior proceeding by Barbara C. Nelson to withdraw the funds constituted a fraud on the court as the assignments from the unknown owners were procured by fraud. The other parties named in the proceeding had obtained some interest in the funds, and for that reason were made parties to the proceeding. It is unnecessary to recite their interest.

The principal question here involved is whether fraud practiced in securing the assignments from the unknown owners constituted fraud upon the court and justified the court in annulling the whole proceeding, canceling the assignments, and directing the appellants to pay the amount which they received with interest into court.

The...