Case ID: ad_74/html/0231-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Austin B. Fletcher and Lewis H. Schultz, as Trustees under the Last Will and Testament of Jackson S. Schultz, Deceased, Respondents, v. John McKeon and Others, Defendants. Ignoz Luft and Ralph Nathan, Appellants.
    
      Contempt—violation by a lessee of an order appointing a receiver of rents in a mortgage foreclosure action, to which he is not a party when the order is made, although made a party thereto before it is violated—effect of a prior order denying such an application.
    
    Where in an action to foreclose a mortgage an order appointing a receiver of the rents and profits of the mortgaged premises is made without notice to a person (not at the time, although afterwards made, a party to the action) who claims to have leased the premises and to have paid a portion of the rent in advance, and after being served with a copy of the order appointing the receiver and being made a party to the action, such person, acting under the advice of his attorney, violates the injunction order, he and-his attorney may properly be adjudged guilty of contempt.
    If the alleged lessee wished to raise the question whether the receivership applied to his interest in the mortgaged premises, it was his duty to make an application to the court.
    An application to punish the lessee and his attorney for contempt is not barred by a former order denying a similar motion where it appears that after the entry of such former order the Appellate Division, when" reversing an order denying the receiver’s motion for an injunction against the alleged lessee, provided in the order of reversal that the receiver might resort to such remedy as he might be advised, without prejudice to the determination had upon the former application to punish the lessee for contempt of court.
    Van Brunt, P. J., dissented.
    Appeal by the defendants, Ignoz Luft and another, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 28th day of May, 1902, adjudging them guilty of contempt of court.
    
      Ralph Nathan, for the appellants.
    
      Joseph M. Lesser, for the respondents.
   Ingraham, J.:

This action was "brought to foreclose a mortgage. On the 22d day of April, 1901, an order was entered appointing a receiver of the mortgaged premises and directing the receiver to collect andreceive from the tenants i,n possession of the premises all the rents thereof “ now due and unpaid, or hereafter to become due,” directing the tenants in possession of such.premises to attorn as such tenant or-tenants to the said receiver, and to pay over to such receiver the rents of the premises, and enjoining the defendant Alma Gut-man, her .agents, servants or attorneys, from collecting the rents of the-premises or from interfering in any manner with the property of the receiver. The appellant Luft claimed possession of these premises under an alleged lease by which he claimed to have leased the premises'for one year from March 1, 1901, for $3,500, of which he alleged he paid in advance the súm of $1,458.33 for rent from March 1- to July 31, 1901. This order does not recite that notice of the application for the receiver was. given to either of the appellants, but from the affidavit of Mr. Lesser^ an attorney in the employ of the plaintiff’s attorney, it appeared that on the 11th day of April, 1901, notice of the plaintiff’s application for a receiver was served by mail npon the appellant Nathan, who had represented himself to be the attorney for the defendant Alma Gutman, who was the record owner of the mortgaged premises : that on the 22d day of April, 1901, the appellant Nathan appeared in court and opposed orally the granting of the application. Mr. Justice Andrews, before whom this application was made, announced at the time of the hearing that he would grant the motion, and an order'on the same day was signed appointing Robinson receiver; that on the 24th day of April, 1901, the receiver qualified by filing his bond and from thenceforth acted as receiver; that on the 6th of May, 1901, a copy of this order appointing Robinson receiver was served upon the appellant Luft at his residence, a copy of the order being left with said Luft, and at the same time a certified copy of the said order was exhibited to him. Luft at this time was not a party to the action. On May seventh' the summons was amended by making Luft a party defendant, and on the 9th day of May, 1901, a copy of the summons and notice of the object of the action were served upon him. It also appeared that proceedings to dispossess tenants in the building for non-payment of rent were instituted by Luft by the advice of the appellant Nathan, and, after Luft had been made a defendant and the summons served on him, Nathan,, as attorney for Luft, pressed such proceedings and a warrant was issued; that subsequently there was a sale of the premises, leaving a deficiency. There is no question but that the defendant Luft and his attorney Nathan had knowledge of the appointment of the receiver, and that any interference with the receiver in the possession of the premises after Luft had been served with the summons was a contempt of court and rendered both the defendant Luft and his attorney Nathan liable to punishment therefor. Whether Luft had a lease of the premises from the owner in good faith or not, he had no right to interfere with the property which the court had taken into its possession, and it appears that after he had been made a party to the action and had been served with the summons he continued his interference with the possession of the receiver. If the receivership did not apply to his interest in the property, and he wished to obtain these rents, it was his duty, to make an application to the court, and not, in defiance of the order of the court, interfere with the possession of the property by the receiver. In his affidavit Luft admits that he collected $160 for the month of June and $150 for the month of July. The order appealed from adjudges Luft and Nathan, his attorney, in contempt and appoints a referee to ascertain the amount of damage sustained by the plaintiff: and the receiver by reason of the misconduct of Luft and his attorney. Under the circumstances disclosed in this case, we think this order was properly granted and that the amount of the fine to be imposed for the contempt is to be determined by the court upon considering the referee’s report.

It is claimed, however, that a former order denying a motion to punish the appellants is a bar to this application. On an appeal to this court from an order denying a motion for an injunction against Luft, that order was reversed, and the order of reversal provided that the receiver might resort to such remedy as he might be advised, without prejudice to the determination had upon the former application of said receiver for the punishment of Luft for contempt of court. This was equivalent to an authority to renew the motion to punish for contempt, and justified the court in determining the application as if the prior motion to punish had not been made.

We think, therefore, that the order should be affirmed, with ten dollars costs and disbursements.

Patterson, Hatch and Laughlin, JJ., concurred; Van Brunt, P. J., dissented.

Order affirmed, with ten dollars costs and disbursements.