Summary
In Home Title Insurance Company v. Isaac. Scherman Holding Corp., 240 AD 851, 267 NYS 84 [2d Dept., 1933] one of the earliest cases finding the "possible exercise of discretion" denying a receiver or curtailing the receiver's rights, the court held such discretion could be exercised "in the case of. hardship or the. like" (id:).
Summary of this case from N.Y. Secured Funding LLC v. Hello Albemarle LLCOpinion
October, 1933.
Order vacating the ex parte order appointing a receiver in the foreclosure action in all respects reversed on the law and the facts, with ten dollars costs and disbursements, and motion denied, with ten dollars costs. A covenant in the mortgage provided that the mortgagee in any action to foreclose should be entitled, without notice and without regard to the adequacy of the security, to the appointment of a receiver; and that the rents and profits were assigned to the mortgagee in the event of any default in the payment of principal or interest or default in the payment of any assessment or water rates. There was default in the payment of interest and water rates. The plaintiff bringing the action of foreclosure had the right to the appointment of a receiver, with the possible exercise of discretion by the court to deny the motion or limit the power of the receiver in the case of hardship or the like. It was not necessary to state in the moving papers that the security was inadequate. (Real Property Law, § 254, subd. 10, added by Laws of 1930, chap. 166; Holmes v. Gravenhorst, 238 App. Div. 313, 316.) The provisions of subdivision 2 of section 150 of the General Corporation Law do not apply to the appointment of receivers of rents and profits of mortgaged property owned by a corporation. ( N.Y. Title Mort. Co. v. Polk Arms, Inc., 262 N.Y. 21.) Moreover, the delay in making the motion to vacate until after foreclosure and sale would be sufficient ground to deny the motion in the exercise of sound discretion. Lazansky, P.J., Young, Scudder, Tompkins and Davis, JJ., concur.