Court Opinion

ID: 5496490
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:53:01.706063+00
Date Added: 2024-06-11T08:33:49.615631
License: Public Domain

Hardin, P. J.,
(dissenting.) Upon the accounting had of the rents and profits received by John Wilkinson, the referee allowed to be deducted from the rents received by Wilkinson the amount expended for necessary repairs, and the amount paid for taxes during the 18 months while the rents were accruing. These deductions were sustained by an order made at special term, now brought before us for review. By the decision made at special term, which has been affirmed by this court and by the court of appeals, it was found as a matter of law that John Wilkinson “should fully account for, and pay over to the receivers to be appointed herein, the amount found due on .said accounting of the net rents and profits collected of said premises from the date of said assignment to July 1, 1886. ” In the judgment which was •entered upon that decision it was provided that John Wilkinson “account for, and pay over to the receivers hereinafter appointed, the amount found due on said accounting of the net rents and profits collected from said premises, from the date of the assignment to Charles E. Hubbell, hereinafter referred to, to-wit, December 9, 1884, to July 1, 1886.” In the action of Bates and others •against Wilkinson and others, it was adjudged that John Wilkinson “ account for, and pay over to the receivers hereinafter appointed, the amount found *416due on the said accounting of the net rents and profits collected from said premises from the date of the general assignment to Charles E. Hubbell, hereinafter referred to, to-wit, December 9, 1884, to July 1, 1886.” It was found by the referee that during the period while the rents were accruing there was “necessarily expended for the care and preservation of the said property, and for repairs thereon, the sum of $1,351.73.” It was also found that “during the same period he paid the proper authorities in discharge of city and county taxes which had been duly assessed, and constituted a lien upon said property, the sum of $9,257.59.” As a matter of law he found that the expenditures “for taking care of and preserving the property, and such as were necessary for realizing the rents and profits, should be allowed to the defendant upon the accounting,”-and that there should be “deducted from the amount of rents and profits received * * * the sums paid by him for taxes and assessments upon said property. ” Inasmuch as the decision and judgment entered thereon provided for an accounting and a payment over of the net rents and profits, I am inclined to think the defendant should be allowed, out of the gross rents received, the necessary expenditures for repairs, and the necessary expenditures for taxes. If such an allowance be made to the defendant, a reasonable interpretation is given to the language of the decision and the judgment, in virtue of which the accounting took place; besides, the creditors receive as much as the property would have yielded, had not the fraudulent conveyance, which has been set aside, been made. Precedents exist for such allowances, which have not been directly interfered with or overruled by any authority which has come under observation. In Van Horne v. Fonda, 5 Johns. Ch. 388, which was a case of actual fraud, Chancellor Kent, in pronouncing the decree and providing for an accounting of a defendant, observed: “He entered in his own wrong, and held under a claim of title procured by fraud, and he is not entitled beyond the amount of his actual expenditures.” 5 Johns. Ch. 415. He observed, further, that all such matters “must be satisfactorily proved,” and he directed a reference to a master to state an account “upon the principles and under the directions already declared. ” In Sands v. Codwise, 4 Johns. 605, an order was made by the court of errors for an accounting against parties who had taken “two deeds grossly fraudulent and absolutely void,” and the decree provided as follows: “And that, in taking such accounts, allowances be made to the said Comfort Sands and Henry Sands for taxes, repairs, and improveménts, permanently useful; and the balance of the accounts for the said last-mentioned rents and profits, when received, shall be placed in the hands of the assignee of the estate and effects of the said Comfort Sands, as such bankrupt.” In Jackson v. Ludeling, 99 U. S. 536, it was stated in the prevailing opinion that “any net earnings of the railroad, or proceeds of property, which shall have come into his hands as such receiver, after paying his expenses and compensation, will go to the benefit of the bondholders.” If the learned trial judge had intended to exclude an allowance to the accounting defendant of the necessary expenditures for necessary repairs, and the necessary disbursements for town, county, state, and municipal taxes, it may reasonably be supposed and held that lie would not have used the expression “net rents and profits” in his decision and the judgment entered thereon. I am therefore of the opinion that the referee committed no error in ascertaining the net rents and profits, in deducting from the gross rents received the necessary expenditures for necessary repairs and taxes already alluded to. That part of the order which allows John Wilkinson $7,973.86 for interest paid on mortgages, $1,351.78 paid for repairs, $9,257.59 for taxes paid, $2,136.90 for insurance paid, and $900 for collecting rents, aggregating $21,620.13, is reversed; and that part of the order charging John Wilkinson with the full amount of rents received, with interest upon them, is affirmed, with costs and printing disbursements against John Wilkinson; the order to be settled by Mr. Justiee Martin.