In re The People

Frankenthaler, J.

This motion presents two questions for determination: (1) The question whether certificate holders who demanded payment in accordance with the prepayment clauses of the mortgage certificates are entitled to priority over the other certificate holders of the same issue, and (2) whether, and to what extent, the title company is entitled to share with the other certificate holders. As to the first question, the court is of the opinion that those certificate holders who demanded payment in accordance with the prepayment clauses of the certificates are not entitled to priority over the remaining certificate holders, but must share pro rata with the latter. (Matter of Title & Mortgage Guarantee Co. of Buffalo, 152 Misc. 428; affd., 243 App. Div. 227; affd., 267 N. Y. 533.) (See, also, Matter of Alexander, 152 Misc. 354, 358.) In respect to the second question, the court is of the opinion that the certificates held by the title company are entitled to share pro rata with those held by other certificate holders (Matter of Lawyers Mortgage Co., 151 Misc. 744; affd., 242 App. Div. 617; Id. 629; leave to appeal denied by the Court of Appeals, 265 N. Y. 508), but that the title company is not entitled to share pro rata as to any sums which are not represented by uncanceled certificates held by it. The cash collateral should be distributed accordingly in reduction of the principal amount of the outstanding certificates, the collateral having been received in payment of principal., Submit order.