In re the Liquidation of Lawyers Mortgage Co.

172 Misc. 574, 15 N.Y.S.2d 676, 1939 N.Y. Misc. LEXIS 2443

• Court: New York Supreme Court
• Decided: May 22, 1939
• Status: Published

Opinion

Frankenthaler, J.

If the certificate to which the present proceeding relates had been issued directly to Lawyers Mortgage Company, instead of to Lawyers Mortgage Safe Deposit Company, said certificate would be subordinate to the rights of other certificate holders since it contains no provision authorizing the title company to acquire and hold certificates for its own corporate account, as did the certificate in Matter of Lawyers Mortgage Company (Simon Borg & Co.) (151 Misc. 744; affd., 242 App. Div. 617; leave to appeal denied, 265 N. Y. 508).

Lawyers Mortgage Safe Deposit Company was a wholly owned subsidiary of Lawyers Mortgage Company. It is no longer in existence, having been dissolved during the year 1936. It had no creditors. The certificate is now held by the Superintendent of Insurance as liquidator of Lawyers Mortgage Company. In view of the fact that the wholly owned subsidiary had no creditors, the parent must be treated as the real owner of the certificate and the corporate entity disregarded. It follows that the certificate is subordinate to certificates held by others than the company.

The motion to compel the trustee to register the certificate “ on a parity with all other outstanding certificates ” and for other incidental relief is accordingly denied.