Court Opinion

ID: 3605364
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:51:00.294706+00
Date Added: 2024-06-11T09:35:45.257404
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 477 
A mortgagee has no claim as such, to the receipt of the rents and profits, of the mortgaged property. (Argall v. Pitts,78 N.Y. 239, 242.) In a proper case upon foreclosure he may have a receiver of such rents, etc., appointed, who will then be entitled to collect and apply them in reduction of the mortgage debt; and in such a case the receiver may be authorized to collect such rents as have theretofore accrued but have not yet come to the hands of the owner of the equity of redemption. (Hollenbeck v. Donnell, 94 N.Y. 342.) It is not, however, within the power of the court to order rents already collected and in the possession of the owner *Page 478 
to be paid over and applied upon the mortgage debt. (Howell v.Ripley, 10 Paige, 43; Rider v. Bagley, 84 N.Y. 461.)
The lien of the mortgagee thereon dates only from the appointment of the receiver, and his right to collect rents extends only to such as are unpaid at the time of his appointment. (Rider v. Bagley, supra; Argall v. Pitts,78 N.Y. 242.) At the time of filing his complaint for foreclosure, in a proper case, the mortgagee may obtain an order restraining the owner, from the further collection of rents, and in such case, upon the appointment of a receiver, he may be authorized to collect such as then remain unpaid. (Lofsky v. Maujer, 3 Sandf. Ch. 71.) It was held in that case, where the owner had taken security from a tenant for the payment of rent, that the receiver could enforce such security and collect the rent remaining unpaid at the time of his appointment; but the principles of that case do not authorize the collection of rents by a receiver which have already been paid, and come to the possession of the owner of the equity of redemption.
At the time of the commencement of the foreclosure in question an order restraining the defendant Scofield from collecting the rents upon the mortgaged property was duly served upon him, as also a notice of notion for the appointment of a receiver. This injunction was subsequently modified by the agreement of the parties so as to permit the defendant's agents, to continue to collect the rents, and retain them to abide the further order of the court. This stipulation was not intended to afford the plaintiff any ground for a claim upon those rents, that did not already exist by virtue of his mortgage, and its attempted foreclosure. The stipulation was intended as a modification of the terms of the injunction, and the dissolution of the injunction necessarily annulled the operation and effect of the stipulation. It operated simply as an amendment to the injunction, and was valid in affecting the defendant's interests, only to the extent that the court had power to affect them by such an order. If that order had resulted in the appointment of a receiver thereunder the court would doubtless have also had power to order the payment of those rents to the person appointed by them; *Page 479 
but such was not the result. Upon the hearing of the motion the court vacated the injunction, and denied the application for the appointment of a receiver. Then nothing stood in the way of the collection of the rents by the defendant Scofield.
The dissolution of the injunction left the parties in the same condition as though it had never been issued, and Baer  Co. thereafter held the rents previously collected, solely by virtue of their authority as agents of Scofield, and liable to pay them to him on demand. When these moneys came to the possession of the defendant's agent it operated as an effectual severance of the rents from the mortgaged property; and the possession of the agent was the possession of his principal. The reasonable interpretation of the language used in the stipulation amending the injunction order, providing that the money collected should be subject to the order of the court, meant an order to be made in that proceeding, and did not mean an indefinite order, made by any court, in any proceeding. These moneys were in no sense in the custody of the court, nor were they collected under its authority, and while the proceedings might have been conducted in such a manner as to create and continue a lien upon them, it was not done, and by the dissolution of the injunction all obstacles in the way of the assertion of Scofield's rights to the absolute disposition of those moneys were removed.
It would seem that this was the view originally taken by the court below when appointing a receiver on a renewed motion, inasmuch as the order then made, required Baer  Co. to pay to the receiver only such rents, as they had collected subsequent to the time of the dissolution of the first injunction.
It follows from these views that the orders of the General and Special Terms should be reversed.
All concur.
Orders reversed. *Page 480