Court Opinion

ID: 6140703
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:38:21.994455+00
Date Added: 2024-06-11T08:54:37.741318
License: Public Domain

Beach, J.
The order to show cause and injunction was issued nearly a month prior to the adjudication in bankruptcy and more than two months before the appointment of the assignee. The bankrupt could not, therefore, without violating the injunction,have exercised any control over the income of the mortgaged property, or assigned or transferred it in contravention of the provisions of the Bankrupt Act. The stipulation signed by his attorneys was made before the adjudication in bankruptcy, and was not “ a pledge, assignment, transfer or conveyance ” of any part of the bankrupt’s estate made by him within four months before the filing of the petition. It was but a wise precaution to insure the collection of the rentals and likely to preserve the income arising from the mortgaged premises. Had the stipulation never been made no change Avould have resulted to the receiver’s right to the rents, and his title to them in no Avise rested upon or flowed from it. Without it he would have collected the rentals accrued betAveen the date of the injunction and his qualification. Neither is the stipulation “ an assignment, gift, sale, conveyance or transfer ” by the debtor of his estate Avitliin the latter portion of the section of the Bankrupt Act under consideration. For the same reasons it is not an instrument, either made by the insolvent Avith intent to give a preference, or received by the plaintiffs, knowing a fraud on the act was intended. No evidence of such intent appears from the record.
The propriety of the receiver’s appointment is conceded, and his right to the rentals came from that appointment, and not from the stipulation. The title of the mortgagor to the rents was subject to the mortgage and all *298incident equities, and the assignee in bankruptcy could take no more than the bankrupt himself possessed.
The case of Hayes v. Dickinson (9 Hun, 277) is precisely in point. There the mortgagor was adjudicated a bankrupt prior to the appointment of a receiver in the foreclosure action. The income in bis hands at the accounting was ordered paid to the mortgagee in reduction of the deficiency, despite the claim of the assignee in bankruptcy.
The order should be affirmed.
Larbemore and Van Hoesen, JJ., concurred.
Order affirmed.