Case Name: The Farmers' Loan & Trust Co., as Trustee, Plaintiff, v. The Staten Island Belt Line Railroad Co. et al., Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1896-05
Citations: 17 Misc. 168
Docket Number: 
Parties: The Farmers’ Loan & Trust Co., as Trustee, Plaintiff, v. The Staten Island Belt Line Railroad Co. et al., Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 17
Pages: 168–169

Head Matter:
The Farmers’ Loan & Trust Co., as Trustee, Plaintiff, v. The Staten Island Belt Line Railroad Co. et al., Defendants.
(Supreme Court, Kings Special Term,
May, 1896.)
1. Foreclosure—Receiver — Order of court as to management of property- ' , "
A mortgagee who procures the appointment of a receiver in an action to foreclose his mortgage thereby submits to. the reasonable discretion of the court as to the management and control of the property through such receiver; and an order of the court in relation thereto is binding upon him.
2. Same — Effect of order.
An order authorizing the receiver to make an agreement with another corporation for a joint perpetual use of a portion Of the property in question, if not appealed from, is not barred by the judgment of foreclosure and is binding on the purchaser.
Motion by the purchaser at foreclosure sale to vacate an order or to limit the duration of an agreement or lease made thereunder and for an order putting him in exclusive possession of the premises.
Julien T. Davies, for motion.
Albert Reynaud and A. S. Bacon, opposed.

Opinion:
Gaynor, J.
A fair statement of the rule seems to be, that when a mortgagee in an action to foreclose his mortgage invokes the extraordinary aid of equity by the appointment of a receiver of the mortgaged property in his interest, he thereby submits to the reasonable discretion of the court in the management and control of the-property through its receiver, and that the action of the court in that respect represents and binds the mortgagee as well as the owner.' High on Rec., § 394a.- After thus generally submitting the property to the discretion' of the court, the mortgagee may not say that the court has no power as to him to do any .act in the conservation and management of the property which lessens the lien of the mortgage, without his- special consent. That was the position this plaintiff put itself in by having the court appoint the receiver. The defendant • railroad company and the plaintiff (the owner and the mortgagee) had the power to bind themselves by making the agreement which the receiver made under the court's order, for .the perpetual joint use with the said defendant company of less than one thousand feet of its route in question by the Port Richmond & Prohibition Park Electric Railroad Company; and the act of the court was for and binding upon both of them. If the court's .order was improvident, or an abuse of discretion, the only way to be relieved from it was by appeal, all parties having been heard upon notice, and the plaintiff having opposed the making of it. It cannot be said that the said order and agreement do not affect the mortgagee, though binding upon the owner, and that therefore the judgment of foreclosure barred the said agreement or lease made under the said order.
This motion of the purchaser at the foreclosure sale to vacate the said order, or to limit the duration of the said agreement or lease to the time of going into possession by the purchaser under the foreclosure, and for an order putting the said purchaser into exclusive possession .of the portion of the route in .question, is therefore denied.
Motion denied.