Citation Numbers: 13 N.E. 96, 106 N.Y. 626, 10 N.Y. St. Rep. 653, 61 Sickels 626, 1887 N.Y. LEXIS 917
Judges: Andrews
Filed Date: 10/4/1887
Status: Precedential
Modified Date: 10/19/2024
The order of February 6, 1883, appointing the receiver in the action, was made on the petition of one of the defendants, upon notice to the other parties, and was *Page 629 granted without opposition. The property sought to be partitioned consisted of four houses and lots on Fifth avenue, in the city of New York, of great value, and the rights and interests of the several parties depended upon the construction of the will of Jacob Weeks, deceased, and involved the determination of complicated and difficult questions. The main object of the receivership was to secure the renting and care of the premises pending the litigation, for the benefit of the parties who should be adjudged to be vested with the legal title to the property. The order, therefore, authorized the receiver to lease the premises, or any part thereof, for a term not exceeding three years from May 1, 1883. The receiver, under the authority conferred, leased the several houses and lots at a large rent for terms expiring May 1, 1886. On the 19th of October, 1885, pending the appeal to the General Term from the judgment of the Special Term, the receiver, upon an affidavit stating that the action was pending on appeal to the General Term, and that he had been informed by the attorney therein that the case would be carried to the Court of Appeals, and that the case would not be finally determined till long after May 1, 1886, and also that unless he was empowered to renew the leases for another term the tenants might leave, and the houses remain untenanted after that date, applied ex parte to the court at Special Term for liberty to renew the leases, and the court thereupon made an order authorizing the receiver to lease the property "for a term or terms beginning from the 1st of May, 1886, and not extending beyond the 1st of May, 1889." The receiver thereupon renewed the leases to two of the tenants in possession for three years from May 1886, and granted a new lease of one of the houses and lots to a new tenant for the same term. The General Term, May 3, 1886, affirmed the judgment of the Special Term declaring the rights and interests of the several parties, and directing a sale of the premises. That judgment was affirmed by this court in February, 1887. The present appeal is from an order of the General Term affirming an order of the Special Term made after the affirmance *Page 630 of the judgment by this court, upon the application of the parties to this action, modifying the order of October 19, 1885, so that it should stand as an order authorizing the leasing by the receiver for the term of one year only from May 1, 1886, and declaring that the leases executed by the receiver were valid only for the term of one year.
The first question relates to the jurisdiction of the court to grant an order on the application of a receiver, ex parte,
without notice to the parties to the action, for the leasing of real property, which is the subject of the receivership, for a term certain which may extend beyond the termination of the litigation. It is well settled that a receiver cannot ex meremotu let the premises which he holds as receiver. "He cannot," said Lord THURLOW, "set and let, or make expenditures upon the estate, without an application to the court," and a lease granted by a receiver without the order of the court was held, inDunford v. Lane (cited in 1 Bro. C.C 160), to be invalid. Formerly, under the English practice, a receiver was not ordinarily permitted to originate steps or proceedings on his own motion. The parties were left to make such application in the case as might be deemed necessary, although the rule was not absolute and applications were allowed to be made by the receiver under special circumstances. (Ireland v. Eade, 7 Beav. 55;Parker v. Dunn, 8 id. 497; Wrixon v. Vize, 5 Ir. Eq. 276.) In this country a broader view is taken, and it is common practice for receivers, on their own motion, to apply to the court for directions as to the execution of their duties. (High on Receivers, §§ 181, 188, and cases cited.) Orders appointing receivers usually contain a clause giving to the receiver liberty to apply to the court for instructions; and where real property is the subject of the receivership the order not infrequently confers the power to lease. We apprehend, however, that it is not necessary under our practice that the order appointing a receiver should contain these provisions in order to justify the receiver in applying for instructions, or the court in granting an application therefor, or in *Page 631
authorizing the receiver to lease the property. It is said that the court has no power to authorize a receiver, pendente lite,
to lease for a term certain, so as to make the lease valid beyond the period of the litigation. There can be no doubt, having in view the object of such receivership, which is to take the care and custody of the property and administer it during the litigation and to hold it to answer the final judgment in the action, that a lease beyond the customary term, according to the nature of the demised property, which might extend beyond the termination of the litigation, would be an unjustifiable exercise of judicial discretion. But to deny the power of the court to authorize a lease for a term certain in any case, or to hold that every lease so authorized is terminable, ipso facto, on the termination of the litigation, would, as was said in Shreve v.Hankinson (
The next question relates to the power of the court to modify or vacate the order so as to affect the rights of lessees who took their leases in reliance thereon. The general power of a court to modify or vacate its judgments or orders for fraud or irregularity, or where it has acted inadvertently, or improvidently, is well settled. It is true, the law protects the title of a third person, being a bona fide purchaser on a sale on an execution under a judgment voidable but not void, although the judgment is subsequently reversed for error (Manning'sCase, 4 Coke, 329; Woodcock v. Bennet, 1 Cow. 711.) This principle does not, we think, preclude the court from modifying or vacating a summary order made improvidently in the course of an action although the rights of third persons may be affected thereby. (See Hale v. Clauson,
All concur.
Ordered accordingly.
On subsequent motion to amend remittitur the following order was handed down:
Ordered. That the remittitur herein be amended by inserting after the word "ascertained," the words "with the expenses of the reference," and also by inserting a provision further modifying the order of the General Term by striking out the award of costs and disbursements against the appellants. *Page 635