South Fallsburg National Bank v. Bloom , 254 N.Y.S. 265 ( 1931 )

Foster, J.

Application by Clarence A. Porter, receiver of the mortgaged premises, for an order settling his accounts and fixing his commission and the fee of his attorney, etc. A cross-application has been made by the defendants Dwyer for an order extending the receivership for the benefit of whatever interests they may have in the funds in the hands of the receiver by virtue of their mortgage.

It is clear that the said defendants have no right to the rents and profits in the hands of the receiver, even assuming that they are senior mortgagees, unless the receivership is”extended. (Sullivan v. Rosson, 223 N. Y. 217.) Their appeal is made to the discretion of the court upon the basis that they were misled by the original order to show cause by which the application for the receivership was made, and that, therefore, they did not read the order appointing the receiver when the same was served upon them. It does not appear, however, that they ever made any inquiry as to the property during the course of the receivership or evinced any interest in the same until nearly fifteen months had elapsed and they were served with a copy of the receiver’s application for a discharge. Under the circumstances, it would not be a fair exercise of discretion to penalize the diligence of the plaintiff by extending the receivership. Nor can the court require the plaintiff to perform a futile act, i. e., the entry of a judgment in an action which has been rendered nugatory by judgment of foreclosure and sale under a senior mortgage.

This application on the part of the defendants is, therefore, denied, without costs. The motion of the receiver to settle his account is granted, without costs. Counsel fee for his attorney is fixed at $250, plus any disbursements actually made. The receiver is allowed the usual commission. Submit order accordingly.