Home Title Insurance v. Isaac Scherman Holding Corp.

240 A.D. 851

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: October 15, 1933
• Status: Published

Opinion

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 Prop. 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.