Opinion
Argued October 15, 1941
Decided November 27, 1941
Appeal from the Supreme Court, Appellate Division, First Department, HAMMER, J.
David Stein, Jesse Starkman, Walter E. Knox and Arthur Knox for appellant. C. Elmer Spedick and John C. O'Malley for respondent.
In statutory proceedings, under section 1077-c of the Civil Practice Act, the court may direct payment only of the surplus produced "during the six months prior to the application." ( Matter of Mortgage Corp. v. Menan Realty Corp., 282 N.Y. 724; Matter of Chase Nat. Bank v. Guardian Realties, Inc., 283 N.Y. 350.) The order of Special Term directing payment of a surplus produced during a different six-month period cannot be sustained on the ground that here the owner of the mortgaged property waived limitations upon the statutory power of the court by its consent to an examination of its records during the period specified in the order. The mortgagee has been afforded opportunity to examine the records showing receipts and disbursements during the six-month period ending July 31, 1940, and, upon the application made under section 1077-c, the court might require production of evidence showing receipts and disbursements for the subsequent period until the application under section 1077-c was made so that the surplus produced during the statutory period could be computed. That would constitute a practical procedure upon this and similar applications.
The orders should be reversed and the matter remitted to the Special Term for a rehearing which will enable it to determine what surplus, if any, was produced during the statutory period, with costs in all courts to abide the event.
LEHMAN, Ch. J., LOUGHRAN, FINCH, RIPPEY, LEWIS, CONWAY and DESMOND, JJ., concur.
Ordered accordingly.