Court Opinion

ID: 5330931
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:13:44.134377+00
Date Added: 2024-06-11T08:29:26.875844
License: Public Domain

Martin, J.
(dissenting). The lease in this case is subordinate to the mortgage which provides for a receiver in case of foreclosure. That receiver has a right to collect the stipulated rents fixed by ' the lease until the judgment of foreclosure and sale. The fact that a lease has been made will not prevent the appointment of a receiver or interfere with the rights of the receiver to collect the stipulated rents.
In Markantonis v. Madlan Realty Corp. (262 N. Y. 354) the court said: “A receiver appointed in a foreclosure action is entitled to receive all the rents and profits, which are an incident to ownership of the property, in advance of and pending a. judgment by the *259court in the foreclosure action and a sale which transfers ownership to the purchaser.”
In Prudence Co. v. 160 West 73rd Street Corp. (260 N. Y. 205, 211) the court said: “ Right to the rents and profits is merely an incident of ownership of the property which has been pledged as security for the mortgage debt. The receiver holds the rents and profits in trust to apply upon a judgment for a deficiency. Any surplus must be returned to the owner.” (Bank of Manhattan Trust Co. v. 571 Park Ave. Corp., 263 N. Y. 57; Holmes v. Gravenhorst, Id. 148; Sullivan v. Rosson, 223 id. 217.)
The receiver in this case had a right to collect all the rents and proceeds from the property by virtue of the mortgage providing for the appointment of a receiver. (Sullivan v. Rosson, supra.)
The arrangement here entered into is a mere subterfuge to escape the effect of a receivership. This agreement and the original lease are both subject to the mortgage and cannot affect or destroy its terms, or prevent the receiver from collecting the rents due from the tenants or subtenants.
The order should be affirmed.
Order reversed, with twenty dollars costs and disbursements, and motion granted.