(dissenting). The present certificate contains no plain declaration indicating that the company is to share on a parity with certificate holders in the proceeds of guaranteed mortgages. Under the circumstances the shares assigned should have priority over those retained by the company. (Fullerton v. National B. & T. Ins. Co., 100 N. Y. 76, 80.)
The language relied on by the company in the present case to support its claim for parity is contained in a document which guarantees to the certificate holder payment of the mortgage. It is found in that portion of the contract defining the interest conveyed under an assignment. Such a certificate purchased by the ordinary investor would not be understood to mean that the purchaser was receiving a guaranty by the issuing company which was to be impaired by reason of the issuing company receiving part of the proceeds of the mortgage in liquidation. Though the intent of the parties, as evidenced by the certificate, should control, the natural equities of the situation should also be *358given due consideration in ascertaining that intention. The clause involved makes no reference to the interest to be received or held by the guarantor, nor does it expressly provide that any such interest may be owned or held by the company. A company selling such certificates would not ordinarily sell all of them at the same time, and the clause invoked might well have been understood by the ordinary purchaser to mean that the company was endeavoring to secure to later purchasers equal right with those granted to earlier ones.
The authorities clearly indicate that the relation between a guaranteeing company and a certificate holder raises a presumption that the guaranteed certificate holders are to be paid first. There, is no language in the present certificate sufficient to overcome that presumption. |
A review of the cases recently decided by our Court of Appeals, ¡ in construing various guaranteed certificates, indicates no holding contrary to the view herein expressed. In Matter of Title & Mortgage Guaranty Co. of Sullivan County [Series S-2] (275 N. Y. 347) the certificate involved provided that “ the share assigned by this certificate shall be a coordinate lien with all other certificates of said-mortgage now or hereafter issued and any share retained by the company.” (Italics mine.) In addition, the certificate in that case provided that upon the collection of the proceeds of the mortgage by the assignor it should have the right “ out of the proceeds of such collection to retain so much as may remain after paying to the, holder hereof whatever may be due to such holder of principal and interest on this certificate as herein provided.” The Court of. Appeals held that these two clauses read together were insufficient to overcome the presumption that the parties intended that the’ certificate holders should be preferred over the mortgage company in the distribution of the proceeds of the mortgage. In its opinion in that case, the Court of Appeals did say that the clause assigning a co-ordinate lien, standing alone, might be read as an expression of intent that in the distribution of the proceeds of the mortgage the assignor and assignee should share ratably. That statement did not, however, amount to a holding that such clause, if it were standing alone, would be construed as granting parity. The court was not passing on a certificate where such a clause stood alone. It had before it one which contained other language requiring the construction arrived at. Moreover there was some difference between the wording of the clause involved in the case last , cited and that involved in the present case. There the words used indicated that provision was being made concerning the rights of future assignees as well as those of the company. Here no *359such intention is expressed. No lien is referred to in the present clause.
In Matter of New York Title & Mortgage Co. [Senes C-2] (253 App. Div. 308; affd., 278 N. Y. 488), the certificate and depositary-agreement contained plain and unequivocal language showing that the parties contemplated that the company was to have a ratable share in the distribution of assets. In addition, the documents contained an express provision that the company might be the holder, owner or pledgee of one or more certificates.
In Matter of People (Lawyers Mortgage Co.) (151 Misc. 744; affd., 242 App. Div. 617) the certificate, in addition to the clause now under consideration, had an express provision that the company might, for its own corporate account, hold similar certificates.
In Matter of Title & Mortgage Co. of Sullivan County (supra, at p. 356) the court, in commenting on its decision in Matter of People (Lawyers Mortgage Co.) (supra), said: “ We are told that this conclusion is inconsistent with the decision of Matter of People (Lawyers Mortgage Co.) (151 Misc. Rep. 744; affd., 242 App. Div. 617). We denied leave to appeal in that case ‘ on the ground that the order is not final ’ (265 N. Y. 508). Some difference, though slight, in the language of the certificate in that case may, perhaps, be sufficient to distinguish it from this case. We could not review the order made in that case, and we express no opinion now upon its correctness.”
Matter of Lawyers Title & Guaranty Co. (Forshay) (279 N. Y. 571) would seem to be authority for denying parity. The language involved in that certificate was identical with that now under consideration. The court affirmed an order preserving priority to the certificate holders. It is true that there the certificate involved had been assigned and repurchased, but I do not see any rational basis for a distinction between a certificate retained by the company and one reacquired by it, in view of the language contained in both certificates. It was provided that the shares assigned were to be equal and co-ordinate with other shares assigned or retained. Greater rights might be said to be held under shares reacquired than under those retained, for under those reacquired the company succeeded to the rights of former assignees who were not guarantors.
The courts should not seek by refinement of language to construe equivocal statements in a certificate, sold under the present circumstances, so as to afford parity to a company charged with the primary obligation to protect mortgage certificate holders against loss. It should apply the meaning that would be given by the ordinary purchaser to the words found in the agreement. So *360construed, it should be held that the presumption that the certificate holder was to be paid first has not been overcome.
Judgment should be for the defendant.
Martin, P. J., concurs.
Judgment directed in favor of the plaintiff adjudicating that the plaintiff’s share, to the extent of $1,825 is equal and co-ordinate with the shares held by other holders of certificates and that the plaintiff is entitled, with respect to said share of $1,825, to a pro rata participation in any distribution by the defendants of the proceeds of the bond and mortgage, without costs. Settle order on notice.