Wyckoff v. Scofield

A receiver of rents and profits appointed in a foreclosure suit has no power without the order of the court to lessen the fund in his hands by expenditures for repairs. It seems, that, if necessary for the preservation of the property, the court may direct the expenditure. A receiver of rents and profits was appointed in an action to foreclose a mortgage upon premises in the city of New York. In consequence of an • excavation upon an adjoining lot the wall of the building upon the mortgaged premises became unsafe, and the inspector of buildings gave notice to the owner' of the equity of redemption and the receiver to make the same secure. They failing to do this, M., the owner of the adjoining lot, under the authority of the inspector, furnished the materials and did the work, and then applied to the court for an order directing the receiver to pay the expense out of the rents and profits, which was denied. Held, that the matter was entirely within the discretion of the court below, and its determination was not re viewable here. Also held,, that no right of compensation at the hands of the receiver was given to M. by the provision of the New York Consolidation Act (§ 473, chap. 410, Laws of 1882), which provides that where an excavation is made upon a lot in the city endangering a wall upon adjoining land, and the person whose duty it is to preserve and protect it fails to do so after notice, the department may make the same secure at the expense of the owner of the wall, and authorizes the person doing the work by direction of the department to recover of the owner for the work and materials; that said act did not cast upon the receiver the duty of protecting the wall.

Appeal from an order of the General Term of the Superior Court of the city of New York, made April 12, 1886, which affirmed an order of Special Term denying a motion on the part of William S. Haddock, the appellant, for an order requiring the receiver appointed herein to pay out of the funds in his hands to said Haddock the sum of $395. (Reported below, 21 J. & S. 237.) This action was brought to foreclose a mortgage upon premises known "as No. 367 West Twenty-third street, in the city of New York, of which defendant Scofield was the owner. Daniel J. Noyes was appointed receiver of the rents and profits accruing therefrom during the pendency of this action. At the same time said Haddock owned the adjoining premises, No. 365. In consequence of an excavation upon this lot, the wall of No. 367 was made unsafe. The inspector of buildings gave notice to the owner and the receiver to make the same secure, and they failing to do so, Haddock, under the authority of the inspector, furnished the materials and did the work, and then applied to the court for an order directing the receiver to pay from the rents and profits $395, expended for that purpose. The petitioner, hy the entry of the order of reference in his behalf, upon consent of the parties, became a quasi party'to this action and his rights can and ought to be determined therein. (Rollwagen v. Powell, 8 Hun, 214.) Upon general principles of equity the receiver is the hand of the court and his possession is the possession of the court. (High on Receivers, art. 134, p. 89; Foster v. Townsend, 68 N. Y. 206; Cary v. Long, 43 How. 498.) Had the receiver applied to the court for permission to take the. necessary measures to support the wall, the court would have ordered him to do so, or had the receiver done the work and paid for it, the court would have sanctioned such payment. (High on Receivers, art. 650, p. 424; id., art. 180, p. 122 ; Green v. Bostwick, 1 Sandf. Ch. 186.) The court, having taken possession of the property for the benefit of all parties concerned, is bound in good conscience to provide against its destruction, and this obligation would extend to compensation of the adjoining owners for moneys necessarily laid out upon it in a case of pressing emergency where there was no time to apply to the court for directions. (Hoover v. Montclair R. R. Co., 24 N. J. Eq. 4; Jerome v. McCarter, 4 Otto [U. S.], 738.) The petitioner’s right to compensation is established by statute. (Laws of 1882, chap. 410, § 473; Smith v. Thackerah, L. R., 1 C. B. 564.) The word “ owner,” in" section 473, of the New York Consolidation Act of 1882 is a general word, and should be construed liberally in the interests of public safety. It has been held in similar statutes to embrace a tenant occupying premises. (Woodward v. Billerica Highway Board, L. R., 11 Ch. Div. 214.) This application was properly made in the action in which the receiver was appointed, (Galster v. Syr. Savgs. Bk., 29 Hun, 594.) The practice of appointing a receiver of rents and profits of mortgaged premises upon application of the mortgagee in an action to foreclose the mortgage is not founded upon statute, but upon general principles of equity. (Astor v. Turner, 11 Paige, 436.) The receiver was not the proper person to be notified to protect the wall. The notice should have been served on the owner. (Laws of 1882, chap. 410, § 473.)