
    Eva A. Thomas, Appellant, v. Henry A. Davis, Respondent, Impleaded with Others.
    
      Mortgage with receivership clause — under what circumstances the court will appoint a receiver.
    
    When a mortgage in process of foreclosure contains a receivership clause and it appears that it is a second mortgage; that the parties in possession are receiving the rents but refuse to pay the interest and taxes, and there is doubt whether the security is adequate, a receiver will he appointed.
    Appeal by the plaintiff, Eva A. Thomas, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 17th day of November, 1903, denying the plaintiff’s motion for the appointment of a receiver pending the above-entitled action brought to foreclose a mortgage.
    
      Charles L. Hoffman, for the appellant.
    
      Henry A. Davis, for the respondent.
   McLaughlin, J.:

This action is brought to foreclose a second mortgage upon cer^ tain real estate in the city of New York. After its commencement the plaintiff moved for the appointment pendente lite of a receiver of the rents, issues and profits of the real estate covered by the mortgage. The motion was denied and she has appealed.

From the papers used upon the motion it appears that in December, 1902, one Andrew J. Thomas owned the real estate in question, which he conveyed to Baldwin & Betts subject to two mortgages, one for $85,000 held by the Metropolitan Life - Insurance Company, and the other for $45,000 held by the plaintiff. The plaintiff’s mortgage bore interest at the rate of six per cent, payable semi-annually, and contained a provision to the effect that if default wére made for a period of ten days in the payment of interest, and for a period of twenty days in the payment of taxes and assessments, the whole of said principal sum of $45,000 should become due at the option of the mortgagee. It also contained a further provision that the mortgagee or her representatives or assigns were at liberty immediately after any default in payment of interest or taxes, upon proceedings taken for the foreclosure of the mortgage, to apply for and be entitled, as a matter of right, without regard to the value of the premises mortgaged, or the solvency or insolvency of the mortgagor or any owner of the premises, upon five days’ notice, to the appointment of a receiver of the rents, issues and profits of the premises covered by the mortgage. Baldwin & Betts defaulted in the payment of interest, and thereupon the plaintiff, exercising her option, elected to treat the whole sum as due and brought an action to foreclose; which "was subsequently discontinued, they having conveyed the property for the consideration of $1,000 to the respondent above named, Henry A. Davis, who on the same day gave a third mortgage for $1,000 to one Pinkney, who resides at Harrisburg, in the State of Pennsylvania. After the discontinuance of the prior action this action was commenced, the complaint setting forth the default in payment of interest and taxes for the year 1903, and by reason thereof plaintiff’s election to treat the whole sum as due. Upon the summons and complaint, affidavits showing the default and extent of the same, together with the value of the property and the pecuniary irresponsibility of the maker of the bond, plaintiff moved for the appointment of a receiver, which motion, as above indicated, was denied.

I am of the opinion that the motion should have been granted. The mortgage sought to be foreclosed is a second mortgage and it may well be questioned, under the facts set out in the papers used upon the motion, whether the property is of sufficient value to enable the plaintiff to satisfy her mortgage on a sale, or realize anything upon the bond. The mortgage contains a provision to the effect that in case default be made in the payment of interest or taxes a receiver may be appointed. This provision of course does not control the court as to what should be .done, but it is a proper subject to take into consideration. (Eidlitz v. Lancaster, 40 App. Div. 446; Fletcher v. Krupp, 35 id. 586.)

The general rule, as I understand it, is, when a mortgage contains such a provision and it further appears, as here, that the mortgage sought to be foreclosed is a second mortgage, that the parties in possession refuse to pay the interest and taxes, are receiving the rents, and that there is doubt as to whether the security is adequate, that a receiver will be appointed.

Here the fact is not disputed that all Davis paid for the property Was $1,000, and that on' the day he took title he mortgaged it for $1,000 to a non-resident; that the rents amount to nearly $1,000 a month, which he is receiving; and that he has neglected and refused to pay the taxes or interest which fell due several months ago. These facts brought the case within the general rule entitling a party to the appointment of a receiver.

The order appealed from, therefore, must be reversed with ten dollars costs and disbursements, and the motion granted, with ten dollars costs.

Van Brunt, P. J., O’Brien, Ingraham and Hatch, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.  