United States v. CERTAIN LANDS IN T. OF HIGHLANDS, NY
| Decision Date | 05 May 1943 |
| Citation | 49 F. Supp. 962 |
| Parties | UNITED STATES v. CERTAIN LANDS IN TOWN OF HIGHLANDS, N. Y., et al. |
| Court | U.S. District Court — Southern District of New York |
Harry T. Dolan, Sp. Asst. to the Atty. Gen. (John A. Jordan, of Brooklyn, N.Y., of counsel), for the United States.
Evan Shelby, of New York City (John E. Walker, of New York City, of counsel), for Merritt Park Estates, Inc.
Percy V. D. Gott, of Goshen, N. Y., for Orange County.
Kopald & Haft, of Highland Falls, N. Y. (Abraham Kopald, of Highland Falls, N. Y., of counsel), for Village of Highland Falls.
Verne R. Foley, of New York City (John W. Simpson, 2nd, of New York City, of counsel), for judgment creditors and mechanic lienholders.
Miller, Bretzfelder & Boardman, of New York City, (George Baker, of New York City, of counsel), pro se and for Cragston Associates, Inc., and others.
John E. Walker, of New York City, for William Conklin.
Awards have been made in this condemnation proceeding and the United States has made deposit in the registry of this court to pay the same, in the following amounts:
DAMAGE PARCEL REPUTED OWNER AMOUNT
I (and including Parcels Cragston Development Corp
XXXVII and XXXVIII) and Cragston Associates
Inc
Land and buildings $90,350.00
XXIII (48.10) Cragston Associates, Inc. 420.00
XXVI (48.13) Cragston Associates, Inc. 600.00
XXVII (48.14) Cragston Associates, Inc. 480.00
XXVIII (48.15) Cragston Associates, Inc. 480.00
XXIX (48.16) Cragston Associates, Inc. 960.00
XXXI (48.18) Cragston Associates, Inc. 120.00
XXXII (48.19) Cragston Associates, Inc
Land and Cottage 2,480.00
XXXIII (48.20) Cragston Associates, Inc
Land and Cottage 3,320.00
XXXIV (48.21) Cragston Associates, Inc. 560.00
XXXV (48.22) Cragston Associates, Inc. 125.00
XXXVI (48.23) Cragston Associates, Inc. 50.00
Motions have been made by the Merritt Park Estates, Inc., the Village of Highland Falls, Verne R. Foley as trustee, and William Conklin, for a distribution of these funds. The United States does not oppose their distribution and appears solely as amicus curiae. The other parties appear, asserting claims to some part of the moneys awarded and deposited. Most of the claims are asserted against the award of $90,350.00 to Cragston Development Corporation and Cragston Associates, Inc. for "Damage Parcel I (and including parcels XXXVII and XXXVIII)".
County of Orange.
No one opposes the allowance of this claim upon the awards. As to Parcel I, it is for unpaid taxes for the years 1938 to 1942 inclusive, aggregating $7,942.26; and as to Parcels XXIII, XXVI, XXVII, XXVIII, XXIX, XXXI, XXXII, XXXIII, XXXIV, XXXV and XXXVI, and a small portion of Parcel I, and of Parcels XXXVII and XXXVIII for unpaid taxes for 1942, the sum of $25.45. The County is entitled to a first lien upon the moneys deposited as aforesaid in the total amount mentioned, together with interest and penalties legally accruing thereunder to the date of payment. United States v. Certain Lands Located in the Town of Hempstead, 2 Cir., 129 F.2d 918.
Merritt Park Estates, Inc.
This claimant has a mortgage dated April 2, 1928, and recorded in the office of the Clerk of the County of Orange on April 4, 1928, in liber 613 of mortgages at page 225, upon which there was due on March 16, 1943, $41,887.12 of principal and $12,468.40 of interest, a total of $54,355.52. So far as appears upon these motions, this mortgage is a first lien upon Parcel I. After the payment of taxes to the County of Orange, no one opposes the payment of the amount due on this mortgage except the Village of Highland Falls, referred to in the next subdivision. The amount of this claim when paid will carry interest to the date of payment. United States v. Certain Lands in Borough of Brooklyn, 2 Cir., 129 F.2d 577.
Village of Highland Falls.
It appears that about eighty acres of the lands described in the mortgage owned by Merritt Park Estates, Inc., are situated in the Village of Highland Falls, and were not taken in this condemnation proceeding. On January 29, 1942, there was due from the Cragston Development Corporation, the owner of those lands, for unpaid Village taxes upon the property mentioned and situated in the Village, $9,806.07. Demand for the payment of the same had been made upon the owner as well as upon Cragston Associates, Inc., which had contracted to purchase the same, and in order to prevent the Village from foreclosing its tax liens, those two corporations, together with the mortgagee Merritt Park Estates, Inc., executed and delivered to the Village an assignment in writing which was filed in this court on February 24, 1943, which granted and assigned to the Village the said amount with interest thereon at the rate of 1% per month from the date thereof, together with the amount of taxes thereafter levied and assessed by the Village against the lands in the Village, "out of the first moneys due the undersigned (the three corporations mentioned) out of any award or payment made or to be made for the real property owned by the undersigned, Cragston Development Corporation, and in which the other parties hereto have the interests above set forth in the above entitled condemnation proceedings". The amount claimed by the Village is as follows:
Amount due on tax liens against
property of Cragston Associates,
Inc., & Cragston Development
Corp. in Village of
Highland Falls on Jan. 29, 1942 $ 9,806.07
Interest allowed by law on said
taxes and tax liens at the rate
of 1% per month 1,372.85
Taxes on same property levied
and assessed by Village of
Highland Falls since Jan. 29,
1942 to wit, 1942 Village Tax 1,266.86
Interest & Penalties due to the
date hereof. 5% first month,
plus ½% per month until paid. 114.02
__________
$12,559.80
Objection is made to payment of this claim by Merritt Park Estates, Inc., and by Verne R. Foley, the trustee, upon the ground that the assignment is void under Section 203 of Title 31 U.S.C.A. and under the cases of National Bank of Commerce of Seattle v. Downie, 218 U.S. 345, 31 S. Ct. 89, 54 L.Ed. 1065, 20 Ann.Cas. 1116, and Manhattan Commercial Co. v. Paul, 216 N.Y. 481, 483, 111 N.E. 76. Merritt Park Estates, Inc., also contends that the assignment in question was obtained from it by duress, and further, that if the claim of the Village is allowed, the amount thereof should be added to the mortgage debt and the claim of the mortgagee increased accordingly.
The assignment to the Village of moneys payable out of the particular fund was clearly an equitable one, if not a legal one, and created a lien upon the moneys awarded when they became available to the owners. Martin v. National Surety Co., 300 U.S. 588-597, 57 S.Ct. 531, 81 L.Ed. 822; Walker v. Brown, 165 U.S. 654, 17 S.Ct. 453, 41 L.Ed. 865; Central Trust Co. v. West India Imp. Co., 169 N.Y. 314-324, 62 N.E. 387; Hinkle Iron Co. v. Kohn, 229 N.Y. 179-183, 128 N.E. 113. When the amount of the awards was paid to the clerk of this court by the government, the interest of the United States in the fund, except possibly as an amicus curiae to assist the court in its determination of those to whom the fund should be paid and to obtain the necessary releases and satisfactions of liens, had ceased. After such payment there no longer remained any claim against the United States. It had done its full duty. City of St. Paul v. Certain Lands in City of St. Paul, 8 Cir., 48 F.2d 805-807. The fund deposited in full satisfaction of any claim against the government then belonged to those who could prove title to it. Section 203 was enacted for the protection of the government so that it would not be endangered of becoming embroiled in conflicting claims, with delay and embarrassment and the chance of multiple liability. Martin v. National Surety Co., 300 U.S. 588-595, 57 S.Ct. 531, 534, 81 L.Ed. 822; Lay v. Lay, 248 U.S. 24, 39 S.Ct. 13, 63 L.Ed. 103; MacGowan v. Parish, 237 U.S. 285-296, 35 S.Ct. 543, 59 L.Ed. 955; Conde v. York, 168 U.S. 642, 18 S.Ct. 234, 42 L.Ed. 611.
In the Martin case, the Downie case upon which the decision in Manhattan Commercial Co. v. Paul, is based, was cited and distinguished and in cases like the present disapproved. There does not seem to me to be any good reason why in this particular dispute the assignment to the Village should be declared void. My decision in this same proceeding and involving this very assignment (46 F.Supp. 386) is not to the contrary. At the time that decision was made, the government had not accepted the award nor made any deposit. And in striking out the assignment at the motion of the government, I expressly did so without prejudice to any further lawful effort on the part of the Village to establish its claim when the award was paid.
The contention of Merritt Park Estates, Inc., the mortgagee, that the assignment was obtained by duress must fail for lack of proof....
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