receiver clause in New York

2010In that regard, given that the affidavit of confession of judgment does not simply contain some minor error of fact, but rather, is wholly insufficient under CPLR 3218 (a) (2), the Supreme Court providently exercised its discretion in declining to amend the judgment by confession as an alternative to granting the Receiver’s motion to vacate it (see Baehre v Rochester Dental Prosthetics, 112 Misc 2d 270, 276 [1982]; cf. Princeton Bank & Trust Co. v Berley, 57 AD2d at 354 ).

1935Counsel arguing against plaintiff quote, from an opinion in the Court of Appeals, the following: “ A receiver appointed in a foreclosure action is entitled to receive all the rents and profits, which are an incident to ownership of the property.” (Markantonis v. Madlan Realty Corp., 262 N. Y. 354, 359 .) In the present instances, however, it is not necessary to inquire as to the authority a court of chancery might give to this receiver were there no clause assigning the rents in the event of default.

1935Co. v. Fulton Development Corp. ( 265 N. Y. 348 ), where we took pains to state that we did not decide the right of the owner to assign rents to third parties so as to deprive the mortgagee of an equitable lien upon those uncollected.

1935We agree with the courts below that in this particular the receiver was in error, and that the mortgagee did not take precedence over general creditors to moneys due and owing for services rendered prior to the appointment of a receiver. *5 New York Security & Trust Co. v. Saratoga Gas & Electric Light Co. ( 159 N. Y. 137 ) is authority for this ruling, from which we have not departed in New York Life Ins.

1932(Welche v. Schoenberg, 45 Misc. 126 ; Rabinowitz v. Power, 131 App. Div. 892 .) “ In a great many mortgages there is inserted a clause giving the holder the right to the appointment of a receiver, regardless of whether or not the security is adequate.

1932(Browning v. Stacey, 52 App. Div. 626 .) “ But it has been said that in the absence of a receiver clause in the mortgage, a receiver pendente lite should not be appointed unless it clearly appears that the mortgagor is not able to meet a deficiency judgment and that the property itself is not worth the amount of the incumbrances on it.

1932(Welche v. Schoenberg, 45 Misc. 126 ; Rabinowitz v. Power, 131 App. Div. 892 .) “ In a great many mortgages there is inserted a clause giving the holder the right to the appointment of a receiver, regardless of whether or not the security is adequate.

1926In Thomas v. Davis ( 90 App. Div. 1 ) this court held that a receiver clause similar to that in the mortgage in suit did not bind the court, and that the adequacy of the security was the prime consideration.

1909In the subsequent case of Derby v. Brandt, 99 App. Div. 257 , the court carried the rule slightly further and decided that the receiver had a claim to rent, free from all defenses that might be raised against the original landlord.

1908This court said in Eidlitz v. Lancaster ( 40 App. Div. 446 ) that it was well established that the existence of a receiver clause in a mortgage gave no absolute right to the appointment of a receiver.

1908We said in Dazian v. Meyer ( 66 App. Div. 575 ): “Since the adoption of the Code the appointment of receivers is regulated by the provisions of sections 713 and 714, which are exclusive so far as the provisions cover the subject.

1891Co. v. Russell, 115 Ill. 52 .) That the fact that a railroad was in the possession of a receiver was no defense to the settlement of an account for taxes against the corporation.

1888Where property is in possession of a third person claiming title, no matter how fraudulent the transfer, the court cannot order it to be delivered up, (Town v. Insurance Co., 4 Bosw. 683 ;) the proper remedy being an action by the receiver to test the question of ownership, (Rodman v. Henry, 17 N. Y. 482 .) There was no power in the court below to ignore this disputed question of title, and to order the judgment debtor to deliver over property not confessedly his.

1888The vieAV which the court of appeals has taken of the remedy of receivership in mortgage cases ( 94 N. Y. 342 ) renders the receiver clause, contained in bonds and mortgages, wholly superfluous, and the decision of this appeal ought not to be embarrassed by any consideration of that clause.

1888Bank v. Pugsley, supra. This objection goes to the very foundation of the judge’s authority to make the order, makes it open to .a motion to vacate it, or to attack upon habeas corpus, as unauthorized in the first instance.

1881(People v. Security Life, 78 N. Y., 114 -130.) On another of the appeals, upon a motion made to correct a remittitur as to costs, the Court of Appeals took occasion to say: “ In the allowance and adjustment of claims upon the making of dividends as well as in the settlement of the accounts of the receiver all the creditors are entitled to a hearing, and occasion may exist for permitting creditors to come to the aid of the receiver in the defense of individual claims made by action or by petition, and we must assume that the occasion existed here for such intervention.