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UNITED STATES v. CERTAIN LANDS

September 23, 1941

UNITED STATES
v.
CERTAIN LANDS IN BOROUGH OF BROOKLYN, KINGS COUNTY, STATE OF NEW YORK et al.



The opinion of the court was delivered by: ABRUZZO

ABRUZZO, District Judge.

This motion was instituted by the petitioner-plaintiff, the government, to resettle an ex parte order of this Court, dated May 5, 1941, which directed payment to the Fulton Savings Bank Kings County, as mortgages, the sum of $1,665.28, representing the principal sum due with interest at the rate of five (5%) per cent, computed up to and including the date of the entering of the said order; and to provide for payment to the said mortgagee of the sum of $1,642.67 in full payment and satisfaction of the mortgage, which includes interest on the principal sum up to and including January 24, 1941.

This proceeding, from which the present motion stems, is one in condemnation and title to damage parcel 14 (involved herein) vested in fee simple in the petitioner-plaintiff, the government, on January 24, 1941, the date of the filing of a declaration of taking and notice and petition in condemnation.

 It appears that on April 26, 1941, Bridget Creighton and Agnes Roche Creighton Murphy, as guardian ad litem for Margaret Creighton, an infant over the age of fourteen years, and the said Margaret Creighton, entered into a written stipulation with the government wherein they waived any defenses which they may have had to the right of the government to acquire the said property for the public use; wherein they waived the right to have Commissioners of Appraisal appointed to determine the fair market value of the property; and wherein they stipulated and agreed with the government to accept as a just and fair compensation for this damage parcel $4,500. The stipulation further provided that an order be made and entered directing the Clerk of the United States District Court for this District to pay to the said owners the sum of $3,800 now on deposit in the Registry of the Court; and that a deficiency judgment be entered against the government for $700; and that all claims, liens, encumbrances, taxes or other charges be first satisfied and discharged of record.

 On January 24, 1941, there was deposited in the Registry of this Court the sum of $239,179 for the use of the persons entitled thereto as a result of this proceeding. This deposit included the value of the damage parcel in question.

 A search of the title of damage parcel 14 disclosed that there was a first lien and mortgage upon the said premises in the principal sum of $2,500.

 The matter was referred to the attorneys for the mortgagee on February 3, 1941, and on February 13, 1941, they filed on behalf of their client, the Fulton Savings Bank Kings County, a notice of appearance, affidavit of title and notice of proof of claim, making claim for the sum of $1,644.50, the balance of the principal due, with interest from February 1, 1941.

 On May 5, 1941, an order was entered in the office of the Clerk of this Court, directing payment to the mortgagee of the sum of $1,665.28, representing the balance of the principal due with interest to May 2, 1941. The government claims that an error was made in computing this amount and has made this application as amicus curiae to limit the interest to January 24, 1941, the date of vesting of title in the government. The mortgagee has opposed the motion to resettle the order in question.

 The sole issue to be determined by the Court is whether or not the mortgagee is entitled to interest after January 24, 1941, the date title vested in the government.

 Since there is an infant owner involved and the claimant-owners are not represented by counsel, the government has brought this motion in the capacity of amicus curiae solely for the purpose of precipitating a determination of the question in view of the innumerable similar situations which will ultimately arise from this proceeding and from other condemnation proceedings in this Court.

 A voluminous presentation of circumstances leading up to the stipulation entered into by the claimant-owners and the government has been prepared by counsel for the mortgagee in an attempt to fortify their claim for interest up to the date of payment. They also contend that the conformity statute, 40 U.S.C.A. § 258a, applies only to owners and that a mortgagee is to be treated separately after the government has settled with the actual owner.

 Under the statute, 40 U.S.C.A. § 258a, it is provided that upon the filing of the declaration of taking and the deposit in court of the estimated just compensation for the use of persons entitled thereto, title vests in the petitioner. It would follow therefrom that any claimants entitled to part of the deposit should make their claims with alacrity since it is definitely stated that no interest shall be allowed on the deposit paid into the registry of the Court. The act further provides that the Court has power to make such orders in respect of encumbrances, liens, rents, taxes, assignments, insurance and other charges, if any, as shall be just and equitable, and the mortgage herein comes within the purview of this provision.

 The filing of a declaration of taking and notice and petition in condemnation on January 24, 1941, was notice to all owners and lienors that title vested in the government and that the deposit representing the estimated just compensation constituted payment to all of the persons entitled thereto. Aside from that, the attorneys for the mortgagee had actual notice of this proceeding and the record so indicates that they were aware of it as early as February 3, 1941; and it is noted in the record that these attorneys filed a notice of appearance, affidavit of title and notice of proof of claim for their client on February 13, 1941.

 The mortgagee's contention that the act refers only to owners and not to mortgagees is untenable. The legal consequence upon a mortgagee is defined clearly in United States v. Certain Land in City of St. Louis, Missouri, D.C., 29 F.Supp. 92, 94: "It seems to be conceded, as well it might, that the fund on deposit in the Registry of the Court stands in the place of the real estate condemned and is subject to the claim of all lienholders for the payment of the amount of ...


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