175 Misc. 393 | N.Y. Sup. Ct. | 1940
This action was brought to foreclose a mortgage on certain real property in Bronx county. By an order of this court dated September 29, 1939, David E. Frankenstein was appointed, receiver to collect the rents issuing out of the real estate in question.
A motion was heretofore made directing the respondent to present his accounts as such receiver; respondent was personally served with a copy of the motion papers and personally signed an acknowledgment of their receipt by him; a copy was also served on the surety on his bond. The motion was granted by default and an order made on July 26, 1940, directing the respondent to present his accounts as such receiver and in the event of his failure to do so within ten days, that the matter of the taking and stating of the accounts of said receiver be referred to an official referee of this court to report thereon. Respondent failed to present his accounts as receiver and thereupon notice of hearing was served on the respondent and on the surety. Hearings were held on October seventeenth and November fourth; the respondent defaulted at both hearings; he was served with a subpoena requiring his attendance before the referee on said October seventeenth; he failed to comply therewith and failed to appear and his default was noted. Proof was made before the referee who reports that he has taken and stated the accounts of the respondent as receiver for the period of his receivership from October 1, 1939, to and including May 31, 1940; that the respondent’s total receipts amounted to the sum of $1,020; his disbursements or allowances aggregated $206.10, leaving a balance on hand as of May 31, 1940, amounting to the sum of $813.90.
A receiver acts both as an officer of the court, and as a fiduciary as well; he is held to the strict responsibility placed upon any trustee in the administration of his trust. (2 Tardy’s Smith, Law of Receivers [2d ed.], § 613, p. 1714.) While no violent inferences are to be drawn against the respondent from his continued failure to account, he is not entitled to assumptions in his favor. (Tenth National Bank v. Smith Constr. Co., 242 Penn. St. 269; 89 A. 76.) The conduct of the respondent is hardly to be regarded with favor.
The plaintiff, unquestionably, was entitled to an accounting, both by the rules of practice as well as by the order of this court. (Beardsworth v. Whitehead, 137 App. Div. 306; Rules Civ. Prac. rule 181.) In the Beardsworth v. Whitehead case (supra) plaintiff was appointed receiver; an order was made directing her to account, which she failed to do; a referee was appointed to take and state her account. The court said: “ It was the duty of the plaintiff, a receiver appointed by and representing the court, to account when called upon to do so. This, as it appears, she has refused to do. The appellant is entitled to build xip an account as best she may.”
It is provided by rule XI of the Bronx County Supreme Court Rxiles, entitled “ Receiver of rents,” that “ A receiver of rents appointed by the Supreme Court shall deposit, in his name as receiver, in a bank or trust company authorized to receive deposits of coxrrt funds and designated by the coxxrt, all moneys received by him; and no withdrawals shall be permitted therefrom except as directed by the court or on a draft or check signed by the receiver and countersigned by the sxxrety on his bond.” The order of September 29, 1939, appointing the respondent as receiver, directed that he deposit in his name as receiver, in the Bronx County Trust Company, all moneys received by him. No effort has been made by him to show compliance with the rule or order; he has vouchsafed no explanation whatever in this respect or as to what he has done with the moneys collected by him.
Rxile 181 of the Rules of Civil Practice, entitled “ Accounts to be kept by receivers of improved real property,” defines in detail the duties of such a receiver.- Inter alia, it provides: “Bach receiver of improved real property shall keep a written account, which shall be open for inspection in his office at all reasonable
The conduct of the respondent evidences throughout a violation of the rules, an utter indifference to them, and the order and process of the court, and, likewise, a total disregard for the duties and responsibilities of his office. In view thereof, and because this application to compel him to account should not have been necessary, he is denied compensation for himself, as receiver, and for any counsel fees. (Rules Civ. Prac. rule 181; Kronenthal v. Rosenthal, 144 N. Y. Supp. 830.) As to the request of plaintiff's attorneys for compensation for the institution of this proceeding, I am not satisfied the power resides in this court to make such an award. Plaintiff may, however, recover his disbursements.
The report of the official referee is confirmed, and the respondent, as receiver herein, is surcharged the aforementioned sum of $813.90. Submit order.