In re the Liquidation of New York Title & Mortgage Co. (Yorkshire Homes, Inc.) , 158 Misc. 717 ( 1936 )

Frankenthaler, J.

The title company obtained the assignment of the collateral mortgage from the owner by surrendering, for a given per od, its right to foreclose for the benefit of the certificate holders and mortgagees whom it represented. In lieu of procuring the rents and profits of the mortgaged properties, by foreclosure actions or rent assignments, it accepted the assignment of the collateral mortgage. In view of the company’s fiduciary relationship to the certificate holders and mortgagees, it could not properly bind itself to refrain from foreclosure, despite the existence of tax and interest arrears, and at the same time use the consideration received for its promise to re'mburse itself for interest paid under its guaranty. The present motion for an order directing the liquidator to transfer the amount in the agency account into the general corporate assets of the title company for the benefit of its general creditors is accordingly denied. The funds in the agency account belong to and should be distributed among the certificate holders and mortgagees. Settle order.