25 A.D.2d 622 | N.Y. App. Div. | 1966
Order entered December 3, 1965, granting the motion of a Receiver in a foreclosure action to compel plaintiff to post security of $60,000 for the payment of the Receiver’s commissions, expenses and attorneys’ fees and staying the foreclosure sale upon failure to post said security, unanimously reversed on the law and the facts, and in the exercise of discretion, and the motion is denied, with $30 costs and disbursements to appellant. Upon an application to settle his accounts, the Receiver requested $34,000 for commissions and expenses as well as an attorney’s fee of $25,000. The account indicated that the Receiver had a balance of $25,000 and outstanding debts of some $22,000. Upon plaintiff’s objections to the account, the matter of settling the Receiver’s account was sent to a Referee to hear and report. Hearings before the Referee have not been completed. In the absence of statute, the mere insufficiency of the property in the hands of a Receiver to pay the expenses of the receivership does not give the Receiver the right to hold the plaintiff in the action personally responsible for the expenses unless special circumstances can be shown making such a disposition an equitable and just one. (Atlantic Trust Co. v. Chapman, 208 U. S. 360; 2 Clark, Receivers [3d ed.], §§ 637.1, 641, subd. [i].) In 1935 section 1547-a of the Civil Practice Act was enacted to permit a court to compel the party who moved for the receivership to pay any deficit in the
