Lacaille v. Feldman

• Court: New York Supreme Court
• Writing for the Court: MATTHEW M. LEVY
• Citation: Lacaille v. Feldman, 253 N.Y.S.2d 937, 44 Misc.2d 370 (N.Y. Sup. Ct. 1964)
• Decision Date: 21 October 1964
• Parties: Petition of Joan B. LACAILLE, for an order determining the title to property levied on under an execution v. Sam H. FELDMAN, and claimed by Ethel Master.

Page 937

253 N.Y.S.2d 937

44 Misc.2d 370

Petition of Joan B. LACAILLE, for an order determining the title to property levied on under an execution v. Sam H. FELDMAN, and claimed by Ethel Master.

Supreme Court, Special and Trial Term, New York County, Part XII.

Oct. 21, 1964.

Bobrow & Handman, New York City (Stanley H. Handman, New York City, of counsel), for petitioner Lacaille.

Jacob W. Friedman, New York City, for respondents Feldman and Master.

Koch & Greenberg, New York City (Theodore M. Greenberg, New York City, of counsel) for respondent Park-58 Corp.

Louis J. Lefkowitz, Atty. Gen. (Lester Esterman, Asst. Atty. Gen., of counsel), for respondent State Tax Commission.

Sidney Posner, New York City (H. William Kehl, New York City, of counsel), for respondent Sheriff of City of New York.

MATTHEW M. LEVY, Justice.

This is a proceeding instituted under Section 696 of the Civil Practice Act (see CPLR § 5239), for the purpose of determining--after judgement, execution and levy--the title and liens and priorities in respect of a lease of an apartment in a cooperative dwelling and the shares of corporate stock related thereto. The parties, as named initially or permitted to intervene, are: the record owner of the residential building (a stock corporation operated as a cooperative), the lessee of one of the cooperative apartments therein and the registered holder of the related stock certificate, his alleged assignee, a judgment creditor of the assignor, the New York State Tax Commission as alleged lienor vis-a-vis the judgment debtor, and the Sheriff of the City of New York who had levied on the execution issued by the judgment creditor. The cause was tried to the court without a jury, the parties waiving enumerated findings of fact and conclusions of law. The relevant facts adduced at the trial and the principal contentions of the parties follow.

On or about July 1, 1956, the respondent Feldman, with the unconditional consent of the landlord, Park-58 Corporation, became the assignee from the then tenant-stockholder of a proprietary lease expiring on September 30, 1999, in the cooperative residential dwelling, and the owner of the corporate stock relating thereto, and thereupon became the tenant-occupant-stockholder of the apartment. On March 7, 1963, the petitioner herein recovered a judgment in the sum of $35,000 against Feldman. Pursuant to an execution duly issued on March 21, 1963, a notice of levy and seizure pertaining to the lease and stock was, on March 25, 1963, served upon the judgment debtor and, on March 27, 1963, upon another respondent herein, the Park-58 Corporation, the lessor of the judgment debtor and the owner of the cooperative building. It has heretofore been held herein that these procedures were duly undertaken and carried out. This holding is the law of the case (Fried v. Lakeland Hide & Leather Co., 14 Misc.2d 305, 308-309, 179 N.Y.S.2d 397, 400-402; Sufrin v. Arbeau, Inc., 24 Misc.2d 909, 914, 206 N.Y.S.2d 499, 504, stay pending appeal denied 10 A.D.2d 554, 200 N.Y.S. 300; Aacon Contracting Co. v. Herrmann, 27 Misc.2d 197, 199, 208 N.Y.S.2d 659, 666; Sorin v. Shahmoon Industries, Inc., 30 Misc.2d 429, 435, 220 N.Y.S.2d 760, 787). ¹

The respondent Master asserts, with the support of the respondent Feldman, that, at all times since August 23, 1957, she (the respondent Master) has been the assignee for value of the aforementioned proprietary lease and related stock certificate, albeit that Feldman continued in occupancy of the premises and the stock certificate continued to be registered in his name. The petitioner disputes the validity of the alleged assignment and contends that ownership of the proprietary lease and shares of corporate stock was in Feldman at the time of entry of judgment and execution and levy thereon. The controverted facts and my findings on that issue will be adverted to later in this opinion.

The New York State Tax Commission, another respondent herein, duly filed tax warrants (bearing specified rates of interest) against the respondent Feldman in the office of the County Clerk of New York County on February 26, 1941 ($64.38), September 26, 1942 ($2,047.60), February 24, 1950 ($89.84) and February 28, 1960 ($53.06), by virtue of the judgment debtor's undisputedly unpaid and past-due State income taxes. The State claims that, since the warrants were filed prior to the entry of judgment by the petitioner, the State is entitled--both at common law and by statute--to priority in the proprietary lease and corporate stock as against the petitioner.

The respondent Park-58 Corporation, the title owner of the entire premises, contends that it has a prior lien on the judgment debtor's interest in the cooperative, based upon the provisions of the by-laws and the stock certificate to the effect that: 'The corporation shall at all times have a lien upon the shares of stock owned by each stockholder to secure the payment by such stockholder of all rents to become payable under the provisions of his proprietary lease and for all other indebtedness due from such stockholder to the corporation'. The lease further provided that the Park-58 Corporation should be reimbursed by the lessee for attorneys' fees incurred by reason of a default by the lessee under the lease, and that the lessor shall have a first lien upon the shares of stock of the lessee for all indebtedness and obligations owing by such tenant. The respondent Park-58 Corporation claims that a default occurred here on April 5, 1963, when it notified the respondent Feldman that his lease was terminated because 'the shares of said stock owned by such Lessee [were] duly levied upon under Court Process.' [See Lease, Article III, Par. First, subd. (b)(4).] On this basis the corporation asserts, more specifically, a first lien for reasonable attorneys' fees in the stipulated amount of $500.

At the outset, the respondent Master is confronted with the contention of the petitioner that the claim of this respondent in this proceeding is barred by the Statute of Limitations. It is necessary, therefore, to note the applicable chronology of events as to that issue. On August 23, 1957, upon receiving a loan in the sum of $16,500 from Master, Feldman allegedly executed and delivered to Master an 'assignment [of the lease and certificate] to secure indebtedness' and a demand note made by Feldman to Master's order for that sum with interest. On June 1, 1961, an instrument signed by Feldman enlarged the applicability of the security to include an additional alleged loan of $3,665. No interest has been paid thereon; no part of the principal has been paid; no demand has been made for payment. In March 1963, as hereinbefore noted, the petitioner recovered judgment against Feldman, docketed the same, and, pursuant to execution duly issued, the Sheriff, in March 1963, levied on the proprietary lease and share certificate--serving Feldman and Park-58 Corporation with requisite notices of levy. The levy was treated as a default on the part of Feldman by the landlord (pursuant to the terms of the lease) on April 5, 1963, when it notified Feldman that this lease would be considered terminated on May 31, 1963. By order to show cause signed on May 23, 1963, upon the judgment creditor's petition of May 22, 1963, this proceeding was commenced to determine title as against the respondent Master, who had delivered her affidavit of claim herein to the sheriff, in accordance with the statute (Civ.Prac.Act, § 696; CPLR § 5239).

It has not been made plain on what theory it is that the petitioner bases her contention that the Master claim is barred by the Statute of Limitations. The clearest expression of the petitioner's point in that regard is at page 10 of her Third Supplemental Trial Memorandum, in which she states that: 'To this date she [Master] has failed and refused to bring such an action against the judgment debtor herein [Feldman] and has made no demand for either payment of principal or interest'. Thus, presumably, the petitioner takes the position that the Statute of Limitations precludes recovery by Master since the statute would begin to run from the date of the issuance of the demand note and expire before the institution of an action thereon by Master--and, in fact, no such action has ever been commenced.

No doubt, the statute begins to run from the date of a demand note and not from any demand thereon (McMullen v. Rafferty, 89 N.Y. 456, 458; Lyons National Bank v. Moore, 14 A.D.2d 488, 217 N.Y.S.2d 279), but there does not, with equal force, appear to be any doubt that Master's interposition of her claim in this proceeding, if before the six-year period expired, is sufficient. Section 11 of the Civil Practice Act provides that 'the periods of limitation * * * must be computed from the time of the accruing of the right to relief * * * to the time when the claim to that relief is actually interposed by the party as a plaintiff or a defendant in the particular action or special proceeding.' (Now CPLR § 203.)

It was held in Matter of the City of New York [Harlem River Drive, Borough of Manhattan], 278 App.Div. 122, 103 N.Y.S.2d 695, affirmed 303 N.Y. 828, 104 N.E.2d 373, a condemnation proceeding, that the owner of a mortgage involved therein, by serving his notice of appearance in such proceeding, claiming to be such owner, had duly interposed his claim, thereby stopping the running of the Statute of Limitations. And in the case of In re Purdy's Will, Sur., 73 N.Y.S.2d 38, at page 43, modified in part on other grounds, 275 App.Div. 786, 88 N.Y.S.2d 2, aff'd 300 N.Y. 688, 91 N.E.2d 586, the court stated: 'It is now well settled that the filing of a proof of claim with the legal representative of a decedent within the time permitted tolls the statute * * *. The contention that the filing of an affidavit by a contingent creditor pursuant to § 207 of the Surrogate's Court Act is not the filing of a proof of claim...